Saturday, February 16, 2013

Audio Resources on the Econ of Car Dealerships

The economics of car dealerships is interesting.  Some time ago, RR and I did this podcast on the subject, and found a bunch of questions we really couldn't answer.

NPR Planet Money just did a piece, where we hear from the car dealers themselves.  The central question is, "Why do we have a system of pricing and bargaining that consumers hate?  I mean, actually hate?"

Nod to Kyle R.


Dr. Tufte said...

You're a quasi-economist: focus on what people do, not what they say.

They say they hate it, but they still end up doing it.

My guess is that it's easy and acceptable to say that hate it. Just like saying they don't like Wal-Mart.

Mungowitz said...

That makes some sense. There are, after all, "no haggle" car shops. But people don't go there because they think the prices are "too high." So, in fact, they must prefer haggling.

Richard P. said...

Prof. Roberts also did a follow-up interview with an actual car dealer, found here:

It was a very interesting discussion.