Actually, no. Such price isn't "efficient" because of how efficient markets are defined [1]: "...prices fully reflect all available information." But in this case one of the market participants (you) are not aware that others are getting a better deal.

In fact, this would lead to widespread pricing discrimination [2] based on what they learned (or bought) about you. Imagine seeing 20% markup on virtually everything available to you online, because every retailer can see your higher-than-average income before their page loads in your browser.

Personalized content (which everyone seems to love) is just an inch away from personalized pricing.

[1] https://en.wikipedia.org/wiki/Efficient-market_hypothesis

[2] https://en.wikipedia.org/wiki/Price_discrimination

Yes, note the all available information.

It's not perfectly efficient because there isn't perfect information, however it's more efficient than it otherwise would be.

More information in the system = greater efficiency.

> More information in the system = greater efficiency.

More information does not always increase market efficiency. In fact, it can have just the opposite effect when there is information asymmetry.

https://en.wikipedia.org/wiki/Information_asymmetry

http://www.economicsonline.co.uk/Market_failures/Information...

For sure, but only in the short term. History shows that there is a push and pull here and that on aggregate more information is being input to the market from all sides and available for price discrimination. Inefficiencies are great for enterprises to attempt to capture, and by doing so exposing the inefficiency.

Suppose a company invented an aids vaccine, and then charged gay folks and injection drug users 20x, because of hey - those at higher risk are willing to pay more for protection would that be a great thing?

Or let's go back to the Paris example. If everyone is paying the most they can afford, that leaves less money on the table for restaurants, cheese and wine when actually in Paris. It's 'great' if you only look at the market dynamics of flights and ignore the economic/social benefits of cheap travel.

Depends on whether you believe healthcare should be treated the same as other products in the marketplace, or if you think they are a public good.

I am trying to understand what you mean by "public good". It's not the formal economics meaning (https://en.wikipedia.org/wiki/Public_good), because healthcare clearly is excludable and rivalrous.

The notion of a "public good" also isn't about how things should be treated, but more about how things necessarily are.

It sort of seems you're making an argument unrelated to economics here, even though it's using words also used in the jargon of economists.

Nope, I'm using exactly as intended.

If one is to believe that healthcare products should be subject to market forces, then their prices should be variable in the same way other products are. In which case the answer to the question is, yes someone with a "niche" health problem would pay a substantially high price.

If however one believes that healthcare should not be subject to market forces, that is, it should be available to all equally (non-excludable) and cannot incur asymmetric costs between users (non-rival) then the answer is no, it would not be good.

The important thing about public goods is, you can't exclude them if you tried. By saying we should pretend that healthcare is a public good, you are saying we have a choice in the matter. This on face makes it a non public good.

This is a fine opinion to have, but you do yourself no favors by misusing jargon like this.

The problem with healthcare is that it's often not negotiable. Let's say you're a billionaire in a world with zero privacy. You get cancer. One company owns the patent on the drug you need to survive. Is it okay for them to charge you a billion dollars for treatment?

> You say "overpay" but if the user pays for it then that would have been an efficient price

This says nothing of the possibility that one party has a lot of information, and the other party has relatively little information, and the guy with very little information is getting screwed.

The implicit assumption is that the service is charging your air fare or whatever based on your ability to pay. So in that sense, in aggregate, it drives equilibrium between supply and demand - and thus is comprised of market clearing prices, as I said.

There is a difference between competitive single price and monopolistic pricing.

Market clearing prices can strongly favor one party or another, depending on the information asymmetries present.

Wouldn't that price be the consumer surplus price (above the market clearing price)? And wouldn't that transaction have been a result from an inefficiency in the market (lack of perfect information)?

Genuinely wondering. My economics is a bit rusty so not sure if what I said is remotely valid

In fact, in a monopolistic market, perfect price discrimination (every consumer pays exactly their individual marginal utility) results in allocative efficiency.

The consumer surplus is zero, but the producer surplus is the maximum possible value.

In other words, the monopolistic supplier would otherwise charge a higher price for everyone if it is unable to price discriminate. If price discrimination is successful, more consumers can afford the product.