Sunday, September 30, 2007

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Well PDog is back from The Interbikes (tm). It was a very good show this year, fewer dudes looking for hook-ups and more shops looking for lines. I ended up sleepging a lot.. hey I got a 10 month old PPuppy.

Still have not seen Penn & Teller.

The after show highlight was Kenny's win at the industry crit. Now I know he was a wringer*. But freakin' Cipo and Bauer raced too so screw that. If it's open to ex pros it's a real race and game on I say.

CNik gets to stay in Vegas for Vision West next week while I get to play mr. mom while Mrs. PDog does her adobe thing in Chicago.

*yes I know it's ringer not wringer

Memo to Banford Bikes: In general I agree that pricing is a problem in cycling. But, honestly, *you* are the problem. And, as a trained economist, let me say it's hard to take your editorial seriously when it revolves around a complete incorrect use of the term price-fixing. Price fixing is when multiple companies act in collusion to create a defacto monopoly.*

And no, requiring authorized dealers of your products to sell at a set price is not a violation of anti-trust laws unless the company is a monopoly.

You also conveniently left out 2 very important reasons for hard MSRPs.

And if you want to get all wonky here you go. I'll see your term-abuse and raise you some actual econ 101.

Let's be clear. The Op-Ed accuses companies like Sinclair of acting unethical by requiring a hard MSRP on the products they distribute. It boolsters this arguement by incorrectly using the term price fixing. Yes, price fixing is unethical. But, again, price fixing would be if Sinclair and enough of the other shoe companies got together to create a virtual monopoly. That's laughable. One the the bike industry does not lack is competition. If anything, the industry suffers from too many products.

On the otherhand, a majority of online and mail order discounters (which, is what we are talking about) are free riders. They rely on brick and mortar shops to stock product for consumers to try out. They further rely on those shops to educate consumers and answer questions about the product. If we want to toss out charges of immorality and unethical behaviour, most economists I know would argue that it's the mail order shops in the grey area here because they shift the cost of marketing from their shop to the brick and mortar shops.

Full disclosure, I know and like the guys at Sinclair. I have neutral feelings about Shimano. I don't like Specialized. I don't shop mail order. But this isn't really about any specific company, my feelings towards them individually.

It is about poor logic and bad economic analysis. That does piss me off.

* interestinglty, the wiki entry makes this same mistake and adds in another. Contrary to the wiki article, the seller is often the victim of price fixing as they are forced to eat the cost of the price fix (which is what Banford's op-ed is arguing is happening to them).

4 Comments:

At Sunday, September 30, 2007 3:01:00 PM, Blogger UltraMick said...

Oh, I think Kenny wrings out more than a few folks, so calling him a wringer might be apropos.

 
At Sunday, September 30, 2007 9:38:00 PM, Anonymous Anonymous said...

you're a trained killer and trained in economics - yikes!

 
At Monday, October 01, 2007 7:11:00 AM, Blogger P-Dog said...

Now you know why I am so dangerous. I can kill you with my hands or bore you to death with my brains.

"Trained Economist" is a strange phrase to me though. And kind of meaningless. Was I trained at work? PhD? By a mutated sewer rat named Stick?

Oh the secrets I keep......

 
At Tuesday, October 02, 2007 5:31:00 PM, Anonymous Anonymous said...

Does that first statement stand for interbikes (trevormays)???

 

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