Is this unethical?

OhLook wrote in post #19175966
But is it fair if you paid five times what the concertgoer in the next seat did to attend the same performance?

So I quoted the question that turned this topic a little sideways today. Sorry about the sideways part.

In light of the conversation today, let's revisit the outcome through the eyes of our original concertgoers.

They guy who paid $1000 for a pair of tickets is thinking, I'm a huge fan. My wife is a Crazy fan. We tried to get tickets when they went on sale but they sold out in 20 minutes. Yeah, we paid too much to get here, but there is no way we weren't coming.

And the guy who paid $200 for a pair of tickets is thinking -- maybe just in the back of his mind, but he's thinking it -- I could have pocketed $800 off these tickets. You know what we could have done with 800 bucks? This show better be good.

So, yeah, it's probably not fair.

Tom Reichner wrote in post #19176304
You just have a very different way of looking at things. And that's okay.

I'm interested in how common our respective ways of thinking are. When I buy something, my thoughts of opportunity cost take the form of "Would I rather have this thing or keep the money?" I'm not thinking "What price would this fetch if I were to sell it?"

I belong to a couple of forums, another one is an automobile forum. On that forum a guy ordered a Limited Edition model, one that has some dealers adding a "Market Adjustment" to the price. The forum member negotiated sticker price with his dealer. When the car arrived, another person was interested in the car and the forum member sold his claim on the vehicle to the guy interested in the LE model for $20K. The forum member then went out and ordered another of the same model from a different dealer, but not the LE model. That car arrived last Friday.

Lou

drsilver wrote in post #19176307
They guy who paid $1000 for a pair of tickets is thinking, I'm a huge fan. My wife is a Crazy fan. We tried to get tickets when they went on sale but they sold out in 20 minutes. Yeah, we paid too much to get here, but there is no way we weren't coming.

And the guy who paid $200 for a pair of tickets is thinking -- maybe just in the back of his mind, but he's thinking it -- I could have pocketed $800 off these tickets.

Or maybe he's just thinking "We were lucky to buy tickets when we did. Who knew they'd sell out so fast?"

OhLook wrote in post #19176317
I'm interested in how common our respective ways of thinking are. When I buy something, my thoughts of opportunity cost take the form of "Would I rather have this thing or keep the money?" I'm not thinking "What price would this fetch if I were to sell it?"

When you upgrade your gear, what do you do with the old stuff? Do you just give it away? Is there a list I can put my name on?

.

OhLook wrote in post #19176317
I'm interested in how common our respective ways of thinking are.

In most things, I am a contrarian .... one who thinks differently than the majority. . I like for my thinking to stand in opposition to the "normal" way of thinking. . I think that most people are wrong about most things most of the time, so I do not want to think like most people. . I have to try to think differently, to ensure that I am not thinking like most people, who are mostly always wrong.

So it wouldn't surprise me at all if, in this area of thought, my thinking does not fall in line with the normal way that most people think.

.

OhLook wrote in post #19176317
When I buy something, my thoughts of opportunity cost take the form of "Would I rather have this thing or keep the money?" I'm not thinking "What price would this fetch if I were to sell it?"

Wouldn't it be most advantageous to consider both the purchase price, and the potential resale price, every time we buy a non-perishable/non-consumable item? . Resale value is what I usually base my "buy it or don't buy it" decision on. . And often, because of resale value, I buy many things used instead of new (even with shoes and clothes, which I often purchase on eBay).


.

drsilver wrote in post #19176322
When you upgrade your gear, what do you do with the old stuff? Do you just give it away? Is there a list I can put my name on?

"Upgrade" my "gear"? Ha ha ha! You're asking the wrong person. I don't even have a DSLR.

Tom Reichner wrote in post #19176346
I have to try to think differently, to ensure that I am not thinking like most people, who are mostly always wrong.

The danger there is that if you're wrong about the thinking of most people, you'll end up wrong yourself. I try to think in a way that suits what I need to do. That means thinking accurately, without regard for what most people think. To begin with, what they think isn't necessarily evident.

Not for me. Selling things is a nuisance; I've rarely done it. When I buy durable goods, I intend to use them until they break beyond repair or wear out.

OhLook wrote in post #19176317
I'm interested in how common our respective ways of thinking are. When I buy something, my thoughts of opportunity cost take the form of "Would I rather have this thing or keep the money?" I'm not thinking "What price would this fetch if I were to sell it?"

My aunt and uncle ran a antique business for many years. This was their life. They would buy something they knew was being under priced and sold for a higher price. Or go to any auction. It will be filled with people thinking the same thing. Anyone who runs a small retail shop selling whatever must think like this at every transaction or they will soon be out of business.

Tom Reichner wrote in post #19176297
.
Regardless of how he obtained the ticket, if he can get $500 for it, and chooses instead to use it himself, then it cost him $500 to get into the concert.

Net profit and how much it cost to get into the concert are two entirely different things - they are not related to one another, and are to be calculated differently.

If I can sell one of my lenses for $4,000, then it is costing me $4,000 to keep that lens. . How much I paid for it has nothing to do with anything, after the fact. . If I paid $10,000 for that lens, but can only get $4,000 for it now, then it is costing me $4,000 to keep and use that lens. . If I found a bargain and only paid $2,000 for that lens, but can get $4,000 for it, then it is still costing me $4,000 to keep and use that lens. . What I paid for it originally has nothing to do with how much it is costing me to keep it and use it now.


.

That's some strange math. I've had some basic accounting classes, so I'm not entirely speaking out of turn. If I spend $100 on a concert for a customer, my expense sheet is going to read $100, that's what will be entered into my employer's accounting system. If our accountants entered whatever the scalpers might be getting, I'm pretty sure the SEC or another agency will be asking to see our books. It seem you are confusing profit/loss, opportunity cost, and sunk cost.

I'd love to see your form of equations regarding the time value of money, and how you compute interest.

Tom Reichner wrote in post #19176346
.

In most things, I am a contrarian .... one who thinks differently than the majority. . I like for my thinking to stand in opposition to the "normal" way of thinking. . I think that most people are wrong about most things most of the time, so I do not want to think like most people. . I have to try to think differently, to ensure that I am not thinking like most people, who are mostly always wrong.

So it wouldn't surprise me at all if, in this area of thought, my thinking does not fall in line with the normal way that most people think.

.

Wouldn't it be most advantageous to consider both the purchase price, and the potential resale price, every time we buy a non-perishable/non-consumable item? . Resale value is what I usually base my "buy it or don't buy it" decision on. . And often, because of resale value, I buy many things used instead of new (even with shoes and clothes, which I often purchase on eBay).

.

That's an interesting point of view that I'll leave here, but I wonder who you consider right?

I generally outfit my hobbies with used gear and I'm always looking for that golden deal: the widow selling her husband's stuff for what he told her he paid for it.

Capn Jack wrote in post #19176445
That's some strange math. I've had some basic accounting classes, so I'm not entirely speaking out of turn. If I spend $100 on a concert for a customer, my expense sheet is going to read $100, that's what will be entered into my employer's accounting system. If our accountants entered whatever the scalpers might be getting, I'm pretty sure the SEC or another agency will be asking to see our books. It seem you are confusing profit/loss, opportunity cost, and sunk cost.

I'd love to see your form of equations regarding the time value of money, and how you compute interest.

There's definitely a difference between price and value. Price is a one-time thing. You find a deal, you pay your money, game over. Value changes over time and can be captured in accounting systems with concepts like capital gains, capital losses and depreciation.

We've been using a unicorn as an example: the investment-grade concert ticket. You don't think about it much because it doesn't happen much. Same with investment-grade lenses. You don't often see lenses that increase in value after the initial purchase. But due to the quirks of capitalism, it does happen sometimes over short periods of time. And if it happens at the moment you're ready buy that lens, then you get caught up in that investment frenzy and you'll be pissed about it, railing against the machine. Your only options are to buy into the frenzy, buy a product with less buzz, or wait out the frenzy. And you can always wait it out. It rarely lasts long.

dangermoney wrote in post #19176262
If it's unethical, then every airline is unethical. Buy a ticket a year before you fly (when there's plenty of seats), you can get a cheap fare. If you can get a ticket the day before you fly, you'll pay through the nose.
If it's unethical, then every hotel operator in cities that host the Super Bowl/Formula One/big sports event is unethical.

It's called yield management. When I learned about it because its use by Amtrak affected me, it seemed fishy. Passengers get the same service no matter how long ago they paid. It costs no more for Amtrak to carry one person than another. Of course, hotel charges may vary seasonally, but the "discounted" winter rates (for instance) are advertised. You know what your room will cost. You can plan.

But are these analogies valid for cameras? Concert tickets and hotel reservations are time-bound: they expire if not used. One might expect high demand just before the event and zero demand after it. Cameras are different. They don't turn into pumpkins at midnight. I see more room for ticket scalping than for seizing a supply of cameras in order to overcharge.

gjl711 wrote in post #19176436
My aunt and uncle ran a antique business for many years. This was their life. They would buy something they knew was being under priced and sold for a higher price.

This too isn't quite analogous. Your relatives bought intending to sell. Consumers buy most things intending to use.

Capn Jack wrote in post #19176445
That's some strange math. I've had some basic accounting classes, so I'm not entirely speaking out of turn.

I'm glad you said this. I had to wind my brain into loops and knots to figure out what Tom was doing with the numbers.

drsilver wrote in post #19176458
There's definitely a difference between price and value. Price is a one-time thing. You find a deal, you pay your money, game over. Value changes over time and can be captured in accounting systems with concepts like capital gains, capital losses and depreciation.

We've been using a unicorn as an example: the investment-grade concert ticket.

Sure, price and value are different things, but . . .

Capital gains and losses don't become real until the asset is sold and a price is known. Depreciation is kind of artificial to begin with; what's allowable is affected by political interests such as industry lobbying.

If tickets can be investments, they're unlike cameras as investments.

drsilver wrote in post #19176458
There's definitely a difference between price and value. Price is a one-time thing. You find a deal, you pay your money, game over. Value changes over time and can be captured in accounting systems with concepts like capital gains, capital losses and depreciation.

We've been using a unicorn as an example: the investment-grade concert ticket. You don't think about it much because it doesn't happen much. Same with investment-grade lenses. You don't often see lenses that increase in value after the initial purchase. But due to the quirks of capitalism, it does happen sometimes over short periods of time. And if it happens at the moment you're ready buy that lens, then you get caught up in that investment frenzy and you'll be pissed about it, railing against the machine. Your only options are to buy into the frenzy, buy a product with less buzz, or wait out the frenzy. And you can always wait it out. It rarely lasts long.

One of those isn't like the others. Depreciation is the loss of fair value of an asset mostly due to wear and tear, or obsolescence. Capital gains and losses are accounted at the time of sale.

In this case, the "investment frenzy" is closer to that of a show than real estate or stock.

OhLook wrote in post #19176501
It's called yield management. When I learned about it because its use by Amtrak affected me, it seemed fishy. Passengers get the same service no matter how long ago they paid. It costs no more for Amtrak to carry one person than another. Of course, hotel charges may vary seasonally, but the "discounted" winter rates (for instance) are advertised. You know what your room will cost. You can plan.

But are these analogies valid for cameras? Concert tickets and hotel reservations are time-bound: they expire if not used. One might expect high demand just before the event and zero demand after it. Cameras are different. They don't turn into pumpkins at midnight. I see more room for ticket scalping than for seizing a supply of cameras in order to overcharge.

This too isn't quite analogous. Your relatives bought intending to sell. Consumers buy most things intending to use.

I'm glad you said this. I had to wind my brain into loops and knots to figure out what Tom was doing with the numbers.

Sure, price and value are different things, but . . .

Capital gains and losses don't become real until the asset is sold and a price is known. Depreciation is kind of artificial to begin with; what's allowable is affected by political interests such as industry lobbying.

If tickets can be investments, they're unlike cameras as investments.

Actually, depreciation is real, but is affected by political interests. A good example is a camera. Once I open that box, I can't sell it, except for unusual circumstances, for what I paid for it. Its fair market value is decreased. A combination of time and usage will decrease the camera's value further. You'd rightfully tell me to get lost if I tried to sell you my 7D2 for what I paid for it.

Capn Jack wrote in post #19176506
Actually, depreciation is real, but is affected by political interests.

Oh, I know depreciation is real. It's only that the formulas in tax law for figuring depreciation embody unrealistic assumptions about averages, besides being distorted by those interests. A camera may undergo hard use or be owned by a little old lady who only drove it to church on Sundays, yet time is the only factor that counts. Fair market value of equipment will decline if the public learns that an improved model will come out soon, but allowable depreciation won't reflect the change.