> “ It turns out if you agree to take on the risk of cancellation”
This is a common fallacy that we can use the pricing mechanism to account for the risk. But whether it’s food poisoning (cheaper prices for expired goods), labor externalities (cheaper prices for goods made with slave / child / exploitative labor), or geopolitical risks (cheaper prices for travel that can be cancelled for reasons that regular citizens simply cannot adequately prepare for), across the board it’s a failed idea.
The information asymmetries and burdens are simply too lopsided against regular consumers. Pricing as information aggregation (thus reflecting correct understanding of risks impounded in prices) is not a thing. It is theorized but fails to exist.
And risks of insolvency are far worse for individuals than for corporations, on multiple levels.
I'm not suggesting the pricing mechanism can be used to fully account for the risk, I'm suggesting that it isn't simply a matter of banning certain contractual conditions, that it is prudent to also consider the inevitable increase in prices that will accompany some of those actions. If you are comfortable with the higher prices, fine. As I point out in my other comment, real world behavior suggests a preference for low prices.
I'm not arguing against regulation, I'm arguing for regulation that acknowledges that certain regulations have an obvious impact on pricing.
There's plenty of middle ground. Bed and breakfast regulation could include a provision allowing the government to make public health the higher priority and require refunds during some declared period of time, and let operators set their own terms otherwise.
> “ that it is prudent to also consider the inevitable increase in prices that will accompany some of those actions. If you are comfortable with the higher prices, fine.”
I addressed this in my original comment above. These risks must be borne by shareholders and executives and not passed on to customers or employees.
Price increases to maintain the same level of profitability is inherently predatory. Rather, it’s simply a cost of doing business borne by the corporation and its shareholders. Airline prices are not higher in response to the airlines bearing the cost of cancellation risks. Instead, airline profits taken by executive bonuses, equity, c-suite perks, and shareholder returns are just lower, while prices, wages and benefits remain the same. Any other outcome where the corporation tries to deflect its responsibility to bear that cost without impacting consumers or employees is immoral predatory behavior that must become illegal, like lobbying, deceptive pricing, price gouging, extensive contractual fine print that consumers are not equipped to read or understand, offering consumers tiers of lower pricing that does not include necessary protections, layoffs or benefit cuts to preserve executive compensation hundreds of multiples above average employees, etc.
If this causes a business to fold, it only means they did not have a viable business. Consumers don’t want the product. Figure out how to bear the cost of these risks or else you haven’t got a business.
This is a common fallacy that we can use the pricing mechanism to account for the risk. But whether it’s food poisoning (cheaper prices for expired goods), labor externalities (cheaper prices for goods made with slave / child / exploitative labor), or geopolitical risks (cheaper prices for travel that can be cancelled for reasons that regular citizens simply cannot adequately prepare for), across the board it’s a failed idea.
The information asymmetries and burdens are simply too lopsided against regular consumers. Pricing as information aggregation (thus reflecting correct understanding of risks impounded in prices) is not a thing. It is theorized but fails to exist.
And risks of insolvency are far worse for individuals than for corporations, on multiple levels.