Friday, May 3, 2013

<sarcasm>Rational Agents in the Economy</sarcasm>

Exhibit 1: http://business.time.com/2013/05/02/jc-penney-reintroduces-fake-prices-and-lots-of-coupons-too-of-course

In early 2012, JC Penney promised the end of “fake prices”—ones that were inflated just so that shoppers could be tricked into thinking the inevitable discounts represented amazing deals.

Things would be much simpler for shoppers, of course, if JC Penney kept that table priced at $150 all along. But remember: Johnson lost his job partly because shoppers rejected his “fair and square” flat everyday pricing

JC Penney’s failed experiment in fair and square pricing reveals how irrational shoppers can be. Yet as a Science News post explained, Johnson’s pricing system failed to resonate with customers precisely because stores removed the cue that helps shoppers make what they think are logical, value-driven purchasing decisions.

The article goes on to explain why this might be “logical”. And while using real prices might help explain JC Penney’s poor performance, the comments section of the article points out a lot of other problems that go on with the company and why these potential customers do not shop at JC Penney.

“My problem is that JC Penney has brought in brands that I have never heard of, eliminated the brands I purchased and has turned it's store into a series of nonsense specialty nooks and is now selling birthday party supplies from Martha Stewart.”

“My last two shopping trips to JCP were simply annoying.  I had a dress (from a rack full of the very same dress) that the register declared  could not be purchased.  The manager came over, said she didn't know why, but she couldn't sell it to me because of the register's message.  I came home, went online, and there it was FOR SALE on the JCP website.”

“Perhaps if the store was not as trashed as a Goodwill with things tossed on the floor and and no 2 identical things hanging on the same rack.”

“I went in recently just to find a nice shirt.  Could not find anything I liked.  Meanwhile, racks overflowing with good choices at Kohl's.”