Should producers be allowed to sell goods in strange quantities? Increasingly, I see yoghurt, juice, shampoo and sauces sold in strange quantities - like 833ml, or 94.6cl, or 674g. This makes it harder for consumers to calculate the price per quantity. Should we ban, or at least limit, strange selling quantities? Here is one reason why we should. Competitive market is good for societys overall utility. And market becomes more competitive with more information available about the products, including information about price. But selling products in complicated quantities makes it harder for consumers to know the price per quantity of goods. (In other words, it raises the cost of access to information about price.) Therefore, to promote societys utility, the government should discourage selling goods in unconventional quantities. But then one may ask: why should it be the duty of producers to make the information about price available to consumers for free? That is, why should it be the producers who must put in effort to help consumers access information about price? Why should it not be the burden of consumers, or of the government, or of somebody else, to find out about the price and make the information available? This is a valid question. After all, a competitive goods market requires only information to be available; it does not matter who makes this information available. (Note that were talking about competitiveness in the goods market here, not competitiveness in the market for information.) You might think that perhaps we can answer the question Who should make information publicly available? by saying Let the market decide. But this answer does not work. A market can operate only when the property rights over the goods traded are well-defined. That is, buying and selling can only happen if people know what goods belong to who. But in the case of the information on price per quantity, it is unclear who has the right over the information. If the producers have the right, then it is legitimate for them either to keep the information to themselves or sell it only to willing consumers. If the consumers have the right, then of course whoever has the information must make it accessible to the consumers. The answer to the question whether to allow strange selling quantities, therefore, depends on the answer to the more fundamental question about the property right over information. And this latter question is an ethical question. Any good answer to it must take into account such fundamental ethical concepts like justice, duty and responsibility, etc. The hope that economists can answer the question better is, therefore, misguided.
Posted on: Wed, 16 Apr 2014 13:03:51 +0000