There is paint arbitrage and clothing arbitrage --- it's called buying wholesale and selling retail. In most cases the role of the retailer as that of a distributor only, and the further processing he/she takes can simply be adding a nice display case. As for buying paint at Home Depot, changing the label and selling it to folks in Beveraly Hills at a ritzy boutique. I suspect that happens too. But if not, it's a very good question.
As for imperfect information and demand being driven by marketing. Of course. Look at the price of diamonds -- all image created by DeBeers. There are many examples of that.
Rick
| fabio guillermo rojas <[EMAIL PROTECTED]>
Sent by: [EMAIL PROTECTED] 02/15/2001 04:12 PM
|
To: [EMAIL PROTECTED] cc: Subject: The paint market |
Someone who used to work in a paint factory told me that
paint manufacturers can sell the same paint for different
prices just by changing the label. The same can would be
marketed to different kinds of consumers and fetch different prices.
>From what I was told, this practice is fairly common in other
industries such as the manufacture of clothing.
Question 1: Why is there no paint arbitrage? (or clothing
arbitrage, etc)
Question 2: This seems to imply that consumers really have imperfect
knowledge and rely on marketing for information. Does this concur
or differ with the way economists think about consumers?
-fabio
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