A nice post about the NY flat rental market. I found myself wondering, does the position you are arguing against at the beginning actually exist, or it is set up only as a rhetorical thing to kill? What I mean is this:
everything’s priced perfectly, no deals to sniff out, just grab what’s in front of you and call it a day. The invisible hand’s got it all figured out—right?
Do people actually think this way? The argument seems to reduce to “This looks like a bad deal, but if it actually was a bad deal then no one would buy it. Therefore, it can’t be a bad deal and I should buy it.” If there are a population of people out there who think this way then their very existence falsifies the efficient market hypothesis—every business should put some things on the shelf that have no purpose beyond exploiting them. Or, in other words, the market is only going to be as efficient as the customers are discerning. If there are a large number of easy marks in the market then sellers will create new deals and products designed to rip those people off.
Don’t we all know that sinking feeling when we find ourselves trying to buy something (normally in a foreign country) and we realise we are in a market designed to rip us off? First we curse all the fools who came before us and created a rip-off machine. Then, we reluctantly decide just to pay the fee, “get got” and move on with our life because its just too much faff, thereby feeding the very machine we despise (https://www.lesswrong.com/posts/ENBzEkoyvdakz4w5d/out-to-get-you ). Similarly, I at least have felt a feeling of lightness when I go into a situation I expect to look like that, and instead find things that are good.
A nice post about the NY flat rental market. I found myself wondering, does the position you are arguing against at the beginning actually exist, or it is set up only as a rhetorical thing to kill? What I mean is this:
Do people actually think this way? The argument seems to reduce to “This looks like a bad deal, but if it actually was a bad deal then no one would buy it. Therefore, it can’t be a bad deal and I should buy it.” If there are a population of people out there who think this way then their very existence falsifies the efficient market hypothesis—every business should put some things on the shelf that have no purpose beyond exploiting them. Or, in other words, the market is only going to be as efficient as the customers are discerning. If there are a large number of easy marks in the market then sellers will create new deals and products designed to rip those people off.
Don’t we all know that sinking feeling when we find ourselves trying to buy something (normally in a foreign country) and we realise we are in a market designed to rip us off? First we curse all the fools who came before us and created a rip-off machine. Then, we reluctantly decide just to pay the fee, “get got” and move on with our life because its just too much faff, thereby feeding the very machine we despise (https://www.lesswrong.com/posts/ENBzEkoyvdakz4w5d/out-to-get-you ). Similarly, I at least have felt a feeling of lightness when I go into a situation I expect to look like that, and instead find things that are good.