Re:Patio11 Wrote A Book On Conversion Optimization For Softw...
by gregpilling on Saturday December 22, 2012 @08:43AM
(#4956536)
I would regard "arms-length" as a situation where both buyer and seller are aware of other options in the market and there is no dirty dealing going on. To use your vehicle analogy, I recently purchased a new truck. I purchased the one with the fancy seats and all the bells and whistles, while being perfectly aware that I could have saved 20% on the cost of the truck had I purchased a more plain but functionally identical vehicle.
I wanted the fancy one, so I bought it.
As I understand it, "arms-length" prices just mean "the price at which two unrelated and non-desperate parties would agree to a transaction". And, obviously factors such as the presence of manipulation, coercion, informational asymmetry and variance between the product and the promises of its marketing have an effect on how "honest" a price is.
Selling a car for $50k that we both know is crap is different from selling one that I know but haven't told you is crap is different from selling one through very persuasive and reassuring marketing and removing all liability through legalease incomprehensible to the customer. Selling a luxury car as a risky investment plan to a non-savvy retiree would be still worse, and selling a car with safety flaws would be downright reprehensible, even if both parties agreed on the price.
People of different cultures and political leanings draw the line in different places, but it's certainly not a simple black and white rule that anything you can get someone to agree to buy is ethical at any price. There's spectrum that goes from saintly and honest to illegal and evil.
My definition of an honest price: an honest attempt to provide at least as much value as you extract. (which the B2B business examples you listed above would be doing)