A Question of Ethics...and Baseball

[CraigSca]

Ok, I heard this the other day on the local sports radio station. It was yet another apologist calling in saying there was no proof that Bonds, Sheffield, etc., were taking steroids and part of his explanation for the records at BALCO went as follows:

I'll paraphrase here - the caller is a pharmacist. He said that the records at BALCO (and their huge $$$ numbers) could have been solely for vitamins and supplements, not steroids. The host then asked why would BALCO charge $10,000+ for a season's worth of vitamins?! The pharmacist's reply was that BALCO probably just overcharged them because they're rich athletes. The phrase that irritated me was: "C'mon, you don't think I'm going to charge a little more for something if Tom Cruise comes in my store?"

For some reason, the host commented solely on the steroids aspect of the call, but his overcharging Tom Cruise REALLY steamed me. In my opinion, it just shows the complete lack of ethics in any profession. Here's this guy wanting to pad his wallet a little more just because a customer has more money and can pay more the product. I SO wanted the host to call him on it - but he didn't.

Does anyone else find this disgusting? To hell with working hard, earning a living and sleeping well at night. Any way you can make a buck seems to be the status quo.

[NoMyths]

Originally Posted by CraigSca

Does anyone else find this disgusting? To hell with working hard, earning a living and sleeping well at night. Any way you can make a buck seems to be the status quo.

And thus you discover one of the problems of capitalism. It isn't unethical behavior under our system.

[Tekneek]

I don't have a problem with someone charging whatever they can get for an item in a free market. The problem is that we do not really have a free market system here.

Something can be allowed under a particular economic ideal, but that does not necessarily make it ethical. Legal is not always ethical.

[Buccaneer]

Originally Posted by NoMyths

And thus you discover one of the problems of capitalism. It isn't unethical behavior under our system.

If such vitamins were put up for auction and if the demand by Tom Cruise (or whomever) was great enough, then $10,000 could be the sell price. Supply and Demand has to control the price of goods because the mechanism that causes higher prices for low supply/high demand situations also causes lower prices for high supply/low demand situations. It gets messed up when the govt puts in price controls and artificially limits supplies.

[clintl]

What Craig is complaining about is price discrimination (charging different people different prices for the same stuff), which is not completely divorced from supply and demand, but is generally frowned upon legally and ethically. I suppose you could make some sort of argument that outlawing price discrimination is a form of price control, but it's certainly not a particularly restrictive one, nor does it have much affect on supply.

[kcchief19]

Originally Posted by Buccaneer

If such vitamins were put up for auction and if the demand by Tom Cruise (or whomever) was great enough, then $10,000 could be the sell price. Supply and Demand has to control the price of goods because the mechanism that causes higher prices for low supply/high demand situations also causes lower prices for high supply/low demand situations. It gets messed up when the govt puts in price controls and artificially limits supplies.

Not the threadjack here, but this has nothing to with with CraigSca's question. The pharmacist isn't setting a price related to supply and demand; he's setting a price based on the wealth of an individual person. He's saying if Tom Cruise walks in, the price for him and him alone is $10,000 regardless of his supply or the demand for the product. This is "premium" pricing at best, emotional or unethical influence on pricing at worst. The government has nothing to do with this pharmacist deciding to bill pad.

I think CraigSca is right -- this is unethical and immoral. Unforunately, that doesn't seem to stop too many people these days.

[Buccaneer]

I agree that price discrimination is probably illegal and definitely unethical. But turn the equation around, if Tom Cruise wanted to pay $10,000 for something, would the seller not do it because that's not his regular price? I guess I spend too much time on eBay selling and buying cards and have seen outrageous prices on both extremes. But you're right, in a store selling goods in normal supply, one shouldn't discriminate - until something happens to the supply or to the demand, then it is naturally discriminated based on who can pay.

[clintl]

Originally Posted by Buccaneer

I agree that price discrimination is probably illegal and definitely unethical. But turn the equation around, if Tom Cruise wanted to pay $10,000 for something, would the seller not do it because that's not his regular price?

If the buyer offered more than the seller's regular price, sure, there's nothing wrong with taking the offer. However, that doesn't appear to be the situation Craig was complaining about.

[CraigSca]

Correct, if Tom Cruise offered to pay that much - no problem. But - in this instance I'm hearing the pharmacist say, "hmm...the regular price is X, but for you Mr. Cruise, it's x+10".

That's wrong.

And please, spare the me the "Evils of Capitalism" garbage.

[ISiddiqui]

Originally Posted by kcchief19

The pharmacist isn't setting a price related to supply and demand; he's setting a price based on the wealth of an individual person.

I think you are confusing the supply and demand for everyone and the supply and demand for each individual. Tom Cruise's individual supply and demand is a little different than the poor guy on the street. If it didn't fit into Cruise's individual supply/demand chart, then he wouldn't buy it. If the overcharging well far above Cruise's demand, then he'd say screw you.

[QuikSand]

There's also a matter of whether the price discrimination is based on the individual, or based on some sort of justifiable class the individual is part of.


I buy an airline ticket today for a flight six weeks from now, I can get a pretty good deal. The airlines know that I have the luxury of shopping around,m or just waiting for a price promotion. I have lots of options.

If I wait until the day before the flight, they might be inclined to charge me more - maybe a lot more. I have now placed myself into a new class of customer -- one who doesn't have as many options as the other class. And they are probably right to suspect I won't be as price-sensitive as the six-weeks-in-advance customers were.


Is this unethical? Most people would probably say not, but that it's just good business sense.


And so, if you're willing to open the door to any variation in price based on the circumstances of the buyer... then it gets a little grayer exactly where you draw the line. With the Tom Cruise example... it might not be completely imprudent to try to gouge him. His resistance to paying an amount that might mean a lot to you as the seller is bound to be low ... and what do you have to lose? Of course, prudence may not be an all-encompassing rationale here, either.

[Easy Mac]

So is it unethical to give celebrities things for free for shopping at your store, but we would still get charged for the same purchase? Its the same idea, and I'm sure it happens more than the price gouging.

[CraigSca]

Originally Posted by QuikSand

There's also a matter of whether the price discrimination is based on the individual, or based on some sort of justifiable class the individual is part of.


I buy an airline ticket today for a flight six weeks from now, I can get a pretty good deal. The airlines know that I have the luxury of shopping around,m or just waiting for a price promotion. I have lots of options.

If I wait until the day before the flight, they might be inclined to charge me more - maybe a lot more. I have now placed myself into a new class of customer -- one who doesn't have as many options as the other class. And they are probably right to suspect I won't be as price-sensitive as the six-weeks-in-advance customers were.


Is this unethical? Most people would probably say not, but that it's just good business sense.

Interesting point. Though I don't really know the airline industry, I would venture to say there is real value to the airlines to know how many seats are sold weeks ahead of time, so I can understand the discount structure. However, having had to deal with the astronomical increase in ticket prices when options are not available, I would find it hard to believe that the short notice of purchasing a ticket like this justifies the huge delta in cost.

Smart? I suppose so, but I'd also say that although there should be an uptick in costs associated with a late purchase, the huge numbers we're talking about aren't justified. Of course, the airline industry isn't exactly making money hands over fist right now either, so it's not like this gouging is exactly going directly to the $25,000 swan carved-in-ice for the office Holiday party.

[MrBug708]

I work and am going to school for Hospitality Management and for the most part, if anyone famous comes into your hotel, you are going to give them a suite for a very generous rate, strictly for the free press that might come with it. Can't imagine any other business would be any different.

[HomerJSimpson]

Originally Posted by MrBug708

I work and am going to school for Hospitality Management and for the most part, if anyone famous comes into your hotel, you are going to give them a suite for a very generous rate, strictly for the free press that might come with it. Can't imagine any other business would be any different.

They wouldn't, and this "pharmacist" is either not really in retail, or a bald-faced liar. If Tom Cruise came into his shop, he'd be giving him free drugs and performing oral sex on him to get him to keep coming to his store.

[HomerJSimpson]

Oh, as for ethics and baseball....what ethics? I mean, from what I'm getting on this board, they should be shooting guys in the butt in the on-deck circle because no one really cares about steriods anyway, and heck some guy 100 years ago threw a spit-ball, so all cheating should be ignored or rewarded.

[Tekneek]

J...so all cheating should be ignored or rewarded.

Is it cheating if it was not against the rules at the time?

[HomerJSimpson]

[quote=Tekneek]

Originally Posted by HomerJ...so all cheating should be ignored or rewarded.[/QUOTE

Is it cheating if it was not against the rules at the time?

I wonder if the little league baseball has rules against steriods? I guess I better call Bonds to see if I can pick up some clear for my nephew.

[Tekneek]

Originally Posted by HomerJSimpson

I wonder if the little league baseball has rules against steriods? I guess I better call Bonds to see if I can pick up some clear for my nephew.

I'm not saying it is right, or even ethical...because it is not. However, is it cheating if it is not against the rules? You didn't say...

[HomerJSimpson]

Originally Posted by Tekneek

I'm not saying it is right, or even ethical...because it is not. However, is it cheating if it is not against the rules? You didn't say...

When something is against the law, does someone really need a rule, too, to call it cheating?

[Tekneek]

Originally Posted by HomerJSimpson

When something is against the law, does someone really need a rule, too, to call it cheating?

Why does the NFL have their "substance abuse policy" if that stuff is already illegal?

[QuikSand]

Originally Posted by HomerJSimpson

When something is against the law, does someone really need a rule, too, to call it cheating?

Yes. You might exceed the speed limit on your way to the ball game, but nobody would sensibly argue that taints your results in the game.


The reason that you have bans and prohibitions in sports leagues is (in this incident case) to prohibit anything unfairly affecting the game itself. (There's also a popular secondary rationale -- image and conduct issues, which one might argue fall fairly under your presumtion above) I think you put steroids into the same class of rules, broadly defined, as illegal equipment -- you're not allowed to use stickum or tearaway jerseys any longer, as the league has decided they are not suitable for fair game play. Such is the use of illegal performance enhancing substances. (Rules against gambling, one could argue, may be in a similar class, as the concern there is a combination of these two things)

[HomerJSimpson]

Originally Posted by QuikSand

Yes. You might exceed the speed limit on your way to the ball game, but nobody would sensibly argue that taints your results in the game.


The reason that you have bans and prohibitions in sports leagues is (in this incident case) to prohibit anything unfairly affecting the game itself. (There's also a popular secondary rationale -- image and conduct issues, which one might argue fall fairly under your presumtion above) I think you put steroids into the same class of rules, broadly defined, as illegal equipment -- you're not allowed to use stickum or tearaway jerseys any longer, as the league has decided they are not suitable for fair game play. Such is the use of illegal performance enhancing substances. (Rules against gambling, one could argue, may be in a similar class, as the concern there is a combination of these two things)

You're right. I'm sorry. I tend to give people too much credit for having common sense.

(I've got to stop posting anything the least bit contrversial. I keep promising myself no more arguing on here, and yet here I go again. Bad Homer! Bad! Bad! Bad!)

[Solecismic]

Which would you rather have? Tom Cruise shopping at your store or Tom Cruise shopping at your biggest competitor's store? Capitalism works just fine.

[HomerJSimpson]

Originally Posted by Solecismic

Which would you rather have? Tom Cruise shopping at your store or Tom Cruise shopping at your biggest competitor's store? Capitalism works just fine.

Nicole Kidman. Or Penelope Cruiz for that matter.

[Glengoyne]

I think the pharmacist's point is more applicable if you apply his analogy to the subject he was discussing. What he is saying is that Balco might well have been charging their clients big money for their special vitamin blend. Throw a bunch of science and marketing behind something, and people will likely pay you quite a bit for it. If they think it will help them out. Bonds and company didn't just waltz into a pharmacy to pick up some cough syrup. I believe the Pharamcist is saying that Cruise is interested in some sort of fancy specialized treatment that the Pharmacist has concocted. In that case, he can charge whatever the client will pay.

[Marc Vaughan]

Originally Posted by CraigSca

Correct, if Tom Cruise offered to pay that much - no problem. But - in this instance I'm hearing the pharmacist say, "hmm...the regular price is X, but for you Mr. Cruise, it's x+10".

That's wrong.

And please, spare the me the "Evils of Capitalism" garbage.

Hmmmm not to go into the 'Evils of Capitalism' - but capitalism is about maximising profit which is exactly what this person is doing.

Its no different to opening a store in a rich area compared to a poor area, in the rich area you'd charge more because you are trying to maximise profits.

Without getting into a debate about whether its right or wrong, Capitalism isn't about morality and doesn't care if its ripping someone off because they're paying over the odds for an item or not.

[Mac Howard]

And here's another European's opinion that there's nothing unethical about charging what the customer can pay

What do we mean by price? Do we mean a fixed number of dollars or do we mean the "realistic cost" to the customer?

If I'm earning only $250 a week then a $50 price tage is very costly to me - I may have to restrict my food bill that week or go without a new pair of shoes or something. It's a costly item.

If, however, I'm a mllionaire then the $50 price is zilch. It effectively costs me nothing - it certainly "costs" me a lot less than the guy on $250 a week.

Now I'm not suggesting that every purchase made should be subjected to a means test - that would be impractical. But it is an practical objection not a moral or ethical one. On ethical grounds I see no objection at all to charging more to the guy who can afford to pay more.