←back to thread

Six months into tariffs, businesses have no idea how to price anything

(www.wsj.com)
462 points JumpCrisscross | 1 comments | 30 Aug 25 20:56 UTC | HN request time: 0s | source
Show context
casey2 ◴[30 Aug 25 21:10 UTC] No.45078043[source]▶
This is how you know most economic theory is a total lie, if it wasn't they would just "price what people are willing to pay" and be forced to eat the loss. Is that cause copper bathtubs are a special item or are you just making up more rules after the fact to patch holes in your leaky theory.
replies(8): >>45078072 #>>45078084 #>>45078092 #>>45078099 #>>45078272 #>>45078591 #>>45078626 #>>45081428 #
coliveira ◴[30 Aug 25 22:36 UTC] No.45078591[source]▶
Economic theory makes some unsubstantiated assumptions, like consumers have information needed to make decisions, and those decisions are rational. In the real world the market is determined by external events that consumers have no way to know.
replies(1): >>45078796 #
WalterBright ◴[30 Aug 25 23:06 UTC] No.45078796[source]▶
"Risk" is the term for unknown information, and is priced in.
replies(1): >>45083042 #
coliveira ◴[31 Aug 25 13:33 UTC] No.45083042[source]▶
How can they even price it if there is no model for (true instead of theoretical) risk?
replies(1): >>45088252 #
1. WalterBright ◴[01 Sep 25 00:08 UTC] No.45088252[source]▶
Things like credit scores, which are a systematic way to evaluate risk. The higher the credit score, the lower the interest rate you get charged. It's all about the risk.

Insurance companies totally operate on evaluating and quantifying risk.