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US cities pay too much for buses

(www.bloomberg.com)
355 points pavel_lishin | 3 comments | 26 Sep 25 13:57 UTC | HN request time: 0.199s | source
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RobKohr ◴[26 Sep 25 19:11 UTC] No.45389953[source]▶
"Federal funding typically covers 80% of bus purchases, with agencies responsible for the remainder."

Well, there is your answer. The one making the purchase isn't the one primarily paying for the purchase. This makes them less sensitive to pricing.

Kinda like how expensive healthcare is since it is paid for by insurance.

Or how you don't care how much you put on your plate or what you choose to eat at an all you can eat buffet.

The second you detach the consumer from the price of something, even through an intermediary such as health insurance, that is when they stop caring about how much something costs, and so the price jumps.

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Y_Y ◴[26 Sep 25 20:02 UTC] No.45390477[source]▶
And congratulations to any of today's lucky ten thousand who are just learning of the Principal-Agent Problem.

https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...

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phil21 ◴[26 Sep 25 20:59 UTC] No.45390962[source]▶
I'm convinced that a great majority of problems in the US these days fundamentally boils down to principal agent problems. The 2008 financial crisis is a great example. Once banks no longer kept mortgages on their own books, it just became a matter of time until that was going to blow up. The incentives change.
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simianwords ◴[27 Sep 25 08:08 UTC] No.45393992[source]▶
You are right but in a roundabout way. It’s true that most problems in US can be explained by this but it’s also true that the west and US particularly are successful because they can bypass the principal agent problem to an extent.

You just have to look at India or Africa a bit to understand the severity to which this problem permeates day to day in these countries.

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mellow_observer ◴[27 Sep 25 15:32 UTC] No.45396603[source]▶
That's an interesting line of thought. How would you say the US/west are able to bypass this problem more effectively?
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simianwords ◴[27 Sep 25 17:09 UTC] No.45397547[source]▶
No matter how poorly one thinks of westerners and their leaders, it is clear that in general they can look beyond themselves and their immediate surroundings when optimising their impact.

The same cannot be said about Indians and other poor people from poor countries. Their optimisation lies solely on themselves or immediate family. This has consequences at every level and even at the political level.

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1. devsda ◴[27 Sep 25 19:30 UTC] No.45398689[source]▶
It is just the case that the west and its leaders have had the luxury of choice and have only seen relative poverty but not absolute poverty for various reasons.

When your are poor and basic necessities are difficult to meet, its natural to optimize for self and not care about the big picture.

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2. zarathustreal ◴[27 Sep 25 22:34 UTC] No.45399923[source]▶
This may explain the phenomenon but it certainly doesn’t excuse it - just because something is natural doesn’t mean it’s smart or morally correct
3. anal_reactor ◴[28 Sep 25 07:13 UTC] No.45402357[source]▶
This is not correct. First, in crisis situations people tend to cooperate more, even though naive model predicts that people would act in self-interest. Second, there have been cases of countries that collectively decided not to be poor, and they stopped being poor once external pressure has been removed. Case in point is a huge part of Eastern Europe after the fall of communism.