Where parties have unequal information, mispricing occurs. It's an obvious enough point. But have you considered that even if the parties have the same information, mispricing occurs? its like a complicated position in a grand master chess game. Each grandmaster has access to exactly the same information, the position of the pieces on the board. Yet two grandmasters might very well disagree as to what the next move might be. If they do disagree, can we say with assurance that one of them is making a mistake? Mispricing the position?
I understand the point well enough. People often think something should be selling at a different price, that it's mispriced. It's just not a very interesting price. I am sure all the bears on this board think Abercrobie is mis priced, And who knows? Maybe it is.
here is what I often see. One store will sell a product for let's say 10 dollars, an adjacent store will sell the same product for nine dollars. Is this an instance of mispricing? If so, which store is mispricing or are both stores mis pricing. Diego says this isn't a case of mispricing, it's the supply curve. The store with the higher price seems to be unwilling to sell at the lower price, preferring to keep the product on the shelves where it can take up valuable retail space.
Where mispricing does occur is in stock exchanges, which is where people have some pricing information, but of course not all information related to prices. Since non mispricing can only occur where everyone is perfectly informed, and since no one is every perfectly informed mispricing always occurs.
the supply curve is the summation of all the prices that suppliers are willing to sell their product at.
I am sure suppliers are willing to sell their product at all sorts of different prices, But the price they have to be concerned about is the one at which it actually sells.
"The "mispricing" in the stock or commodities market that Msch talks about is not due to some buyers or sellers having a lack of pricing information that others have."
And to one degree or another, that happens in just about every sale in every market. Buyers and sellers just don't ever have the same information.
What you are observing is inefficiencies in the market due to sellers and buyers not having perfect information.
What I find interesting, and inefficient is that when participants have information, they often seem to ignore it. Why do people sell the same stuff at different prices even when the prices are publicly disclosed? That seems to me, an instance of mispricing, and it happens all the time.
"That is when the market clearing price (known to everyone) does not reflect some intrinsic aspect of the product being bought and sold."
I suppose one could define it that way, but the fact is trades occur all the time between parties who have different levels of information.
What you are also observing is multiple markets and not necessarily pricing anomalies.
Yes, that is one way to define away the problem. But that just kicks the can a bit further down the road. Looking at the issue your way, the questions becomes not why there are multiple prices, it becomes why are there multiple markets? Walmart and Target do not exist in separate universes. Both have ads in the Sunday paper listing prices. I am sure there are many reasons internal reasons for pricing differences, but they aren't of concern to shoppers.
What's there to wonder???
Whether media can keep pace with the changes, I suppose. Msch likes to talk about "mispricing". What I see a lot of, are pricing anomalies. Why is the same product selling for two different prices often in near proximity to others. Why do two people get different wages for doing the same job. That sort of thing happens all the time, and one of the messages I take from that is that markets and market forces are far less influential than many people think.
"my speculation is that you are an oddball in the sense that few people watch Downton Abbey and the number of people who watch it on HuluPlus is even fewer if not "downright" negligible."
At the moment, my sense is that the computer streaming services are afterthoughts for advertisers or marketers to the extent that any of them think of the services at all. But what I am wondering is whether the media market will change, and whether marketers can keep pace with those changes. The way we used to market things, through mass media pretty much died with mass media. Audiences for popular shows are a fraction of what they used to be. Now computer streaming is challenging the cable monopolies that supplanted the broadcaster monopoly. Will services like Sling, Hulu, and others finally disrupt cable's bundling monopoly. The Supreme Court did it's best to protect the old model by putting Aereo out of business, but I can't help thinking the court's rear guard action to protect the past is doomed as such actions often are.
You can't target much with a physical Sunday paper beyond geography.
Nope, but you can reach those who do more effectively. Newspapers are going out of business but the Sunday ads are the reason they haven't gone out of business yet. Print media is going out of business but not because the ads are ineffective, although some are. It's going out of business because of declines in readership. Want ads are a huge exception to that. Want ads used to be the cash cow for newspapers, but the internet is a much more effective and much cheaper way to do what want ads used to do.
Even you are living proof that advertisers are better able to target you and not waste marketing dollars needlessly.
I see those ads mostly in the Sunday newspaper which has a huge amount of advertising I don't see. If advertisers were able to effectively target me, those ads wouldn't be in my paper. And more ads I do see would be.
There certainly are opportunities for more targeting. And for all I know, more targeting is happening. As people watch more TV on computer streaming, the providers will have a more specific sense of who is watching their shows. As an older guy, I watch stuff like Downton Abbey. Can I expect to see more laxative commercials when I watch HuluPlus? That's entire possible, but I don't think it has happened yet.
A big reason I don't "see" ads on my computer, targeted or otherwise is that they don't appear on my screen.
Goodwill will buy ANF in order to streamline the process of getting ANF goods to their shelves and practice FAST FASHION delivery.
Are you saying they would buy the stores? Then wouldn't Goodwill be a middle man just like Abercrombie? If they do that, are you suggesting they should still sell used clothes? Is that a sound retail strategy?
And here is an exception. I watch quite a lot of HuluPlus. HuluPlus has ads, and because it's difficult to switch away from them, they are more visible. I really do see those ads in both senses I use the word. However, the problem for the advertiser seems to be that HuluPlus has such a small audience, advertising on the service seems to be an afterthought they don't think very frequently.
Yes, PBS. I do watch Downton Abbey because I enjoy watching people eating dinner beautifully. They seem to have two ads, one for Ralph Lauren, and one for a cruise line. I suppose both ads are vaguely appropriate to my demographic, but neither appeal to me. That they run codger ads is a reason why the show isn't on commercial media.
Something I should add. I am older guy, and as a result, advertisers don't target me, and so it's never surprising to me that advertisements seem ineffective. That's why I am careful about the risks of projection here.
People don't buy stuff in the winter after Christmas. Basically, this company is a speculation as to how fall and holiday sales will be.
It's also about computers. For various reasons, computer advertising isn't effective with me, either consciously or on a subconscious level. I am often surprised, by how some companies miss easy opportunities to be more effective. I wonder why Amazon, for example, doesn't have sales during snow storms.
What media did you read?
I read a lot of newspapers, I look at a lot of stuff on computers. Cable forms a very small part of what I watch on TV. I mostly watch Netflix and Amazon prime. PBS sometimes. I don't go to large retailers much, and I am the sort of person who rarely leaves a store with an unexpected purchase. I live in Minnesota, home of Target which is very big here.
But my question isn't rhetorical. There are reasons why I personally don't see a lot of ads that aren't applicable to many others. I don't want to project here. My question here is intended to elicit information I don't have. Do people really see advertising? Actually I mean this in two senses. Do people literally see it? Or do they channel surf, or do something else when ads come on? Or do they figuratively see it? My own theory is that people do not 'see" ads for things they aren't interested in. The ads I do "see" are for things like electronics or books, stuff that I buy. I don't meaningfully see ads for products I am not interested in.
Effectiveness of advertising questions in this age of the TV clicker aren't asked enough. A big reason for that, IMO is that the media which is one place where these questions could be asked, is so dependent itself on advertising.