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mack the knife
Joined: 16 Jan 2003
Location: standing right behind you...
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 Posted: Sat Nov 25, 2006 6:51 am Post subject: Price fixing is alive, well and apparently legal |
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When we moved into my current apartment last January, our unit was selling for W280 million. Just last week, my wife saw a notice in the elevator which called for a meeting of all the ajumas in the building to get together to establish a minimum price for the units in this building. The security guard repeatedly made announcements reminding folks of the meeting.
Today we were riding the elevator and my wife said "Oh, no way!" and I said "Whuh?", and it turns out that the ajumas agreed to fix the minimum price of the units in this building at 15 million per pyeong.
Our unit is a 34 pyeong unit. I did the math and guess what? Our apartment value has suddenly, arbitrarily skyrocketed from W280 million to W510 million because a bunch of wrinkled biddies decided that's the way it should be.
This was all completely, way, way above board. The notices were everywhere. The security guard announced it with alacrity.
Market principles? Sheee-it. Those are for *****.
You gotta love Korea. You really, really do.
Mod Edit: Edited for language. |
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cdninkorea
Joined: 27 Jan 2006
Location: Seoul
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| Posted: Sat Nov 25, 2006 7:07 am Post subject: |
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You can't ignore market principles- in the long run, reality always wins.
What I'm saying is that they can't set the price at that and get away with it if no one agrees to pay it. After all, there are plenty of buildings, right? |
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mack the knife
Joined: 16 Jan 2003
Location: standing right behind you...
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| Posted: Sat Nov 25, 2006 7:28 am Post subject: |
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| Quote: |
| What I'm saying is that they can't set the price at that and get away with it if no one agrees to pay it. After all, there are plenty of buildings, right? |
Problem is, there are enough desperate people willing to pay it. It's extremely hard to get a decent apartment in our area (when you need it). |
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Return Jones
Joined: 06 Feb 2004
Location: I will see you in far-off places
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| Posted: Sat Nov 25, 2006 7:33 am Post subject: |
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| mack the knife wrote: |
| Quote: |
| What I'm saying is that they can't set the price at that and get away with it if no one agrees to pay it. After all, there are plenty of buildings, right? |
Problem is, there are enough desperate people willing to pay it. It's extremely hard to get a decent apartment in our area (when you need it). |
I hope you're not complaining. It sounds like the old ajummas just made you a lot of money. Korean economic methods often defy traditional models in many respects. Go with the flow, they just about doubled your money. |
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mack the knife
Joined: 16 Jan 2003
Location: standing right behind you...
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| Posted: Sat Nov 25, 2006 7:36 am Post subject: |
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| Quote: |
| I hope you're not complaining. It sounds like the old ajummas just made you a lot of money. Korean economic methods often defy traditional models in many respects. Go with the flow, they just about doubled your money. |
Except I don't own my apartment. I put down the key money.  |
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Return Jones
Joined: 06 Feb 2004
Location: I will see you in far-off places
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| Posted: Sat Nov 25, 2006 7:41 am Post subject: |
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| mack the knife wrote: |
| Quote: |
| I hope you're not complaining. It sounds like the old ajummas just made you a lot of money. Korean economic methods often defy traditional models in many respects. Go with the flow, they just about doubled your money. |
Except I don't own my apartment. I put down the key money. |
Then think of it as having gotten a deal. Your landlord is probably now kicking himself for requiring too low a deposit. That's gotta be worth something! |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sat Nov 25, 2006 7:59 am Post subject: |
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| Did you ever compare prices on many items between Carrefour and the Korean stores? A loaf of freshly baked bread at Carrefour was 980 won. It's 2,000 won at Emart et al. 200 grams of coffee was 3500 won at Carrefour. It's double that at Emart etc. I think there's a lot of price fixing going on in the grocery market. I mean check out the price of Korean electronics in America where they have to compete on a level playing field with Japanese electronics. Then compare the price of Korean electronics where they only have to be a little bit cheaper than the Japanese competitors with duty jacking up the price. |
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HapKi
Joined: 10 Dec 2004
Location: TALL BUILDING-SEOUL
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| Posted: Sat Nov 25, 2006 8:22 am Post subject: |
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I love how on rainy days salesman in the subway suddenly appear hawking use-them-once-before-they-break umbrellas for 7,000won.
My parents are coming to Korea for a week. Looking for a hotel, I thought a Love Hotel might be a nice twist. The idea was nixed for two reasons (actually 3 if you include my Korean wife being too embarrassed at the idea.). First, they refuse to give out Love Hotel rooms for 7 days blocks, as they'd prefer the 3 hour turn-over. And second, talking of price gauging, on Saturdays they double their rates. A decent value for 50,000 suddenly becomes 100,000 Saturdays. Talk about supply and demand!! |
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HapKi
Joined: 10 Dec 2004
Location: TALL BUILDING-SEOUL
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| Posted: Sat Nov 25, 2006 8:35 am Post subject: |
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| Isn't "dumping" the English loan word/konglish for price fixing? |
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kotakji
Joined: 23 Oct 2006
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| Posted: Sat Nov 25, 2006 8:47 am Post subject: |
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| HapKi wrote: |
| Isn't "dumping" the English loan word/konglish for price fixing? |
Similarly suspect practice but intended to have nearly the opposite effect. Dumping is the process of selling your product artificially low in a different market to put the competition out of business. |
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RACETRAITOR
Joined: 24 Oct 2005
Location: Seoul, South Korea
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| Posted: Sat Nov 25, 2006 8:53 am Post subject: |
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| The one aspect of capitalism that matters here is supply and demand. |
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mack the knife
Joined: 16 Jan 2003
Location: standing right behind you...
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| Posted: Sat Nov 25, 2006 9:12 am Post subject: |
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| Quote: |
| The one aspect of capitalism that matters here is supply and demand. |
When a single person decides to sell his or her home for a ridiculous price because, for whatever reason, they think someone will pay that price, that's supply and demand. When the whole building/neighborhood gets together to collude on the price of homes, that's price fixing (which is a big-time no-no where I come from). |
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Young FRANKenstein
Joined: 02 Oct 2006
Location: Castle Frankenstein (that's FRONKensteen)
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| Posted: Sat Nov 25, 2006 10:17 am Post subject: |
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| HapKi wrote: |
| The idea was nixed for two reasons (actually 3 if you include my Korean wife being too embarrassed at the idea.). First, they refuse to give out Love Hotel rooms for 7 days blocks, as they'd prefer the 3 hour turn-over. And second, talking of price gauging, on Saturdays they double their rates. A decent value for 50,000 suddenly becomes 100,000 Saturdays. Talk about supply and demand!! |
Are you in Seoul? In Insa-dong there's a love hotel there but neither point above applies. My mom stayed there for 2 weeks, 40,000/night, no problem. Manager speaks English, too.... Can't remember the place's name, but it's about halfway down Insa-dong street on a side street across from the Soo-do Pharmacy(수도약국) IIRC. Might be called Daelim Hotel, or Saelim? Your wife shouldn't be too embarrassed... it's not a sleaze-hotel... looks like a regular hotel. |
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The King of Kwangju
Joined: 10 Feb 2003
Location: New York City
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| Posted: Sat Nov 25, 2006 11:15 am Post subject: |
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Am I missing something? What's stopping anyone from selling at a lower price than the ajumma decree?
| mack the knife wrote: |
| Problem is, there are enough desperate people willing to pay it. It's extremely hard to get a decent apartment in our area (when you need it). |
Isn't this supply and demand, market forces at work? |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sat Nov 25, 2006 4:38 pm Post subject: |
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| HapKi wrote: |
I love how on rainy days salesman in the subway suddenly appear hawking use-them-once-before-they-break umbrellas for 7,000won.
My parents are coming to Korea for a week. Looking for a hotel, I thought a Love Hotel might be a nice twist. The idea was nixed for two reasons (actually 3 if you include my Korean wife being too embarrassed at the idea.). First, they refuse to give out Love Hotel rooms for 7 days blocks, as they'd prefer the 3 hour turn-over. And second, talking of price gauging, on Saturdays they double their rates. A decent value for 50,000 suddenly becomes 100,000 Saturdays. Talk about supply and demand!! |
Most hotels vary their rate depending on day. Some have a cheaper weekend rate (tourists) and then have a higher week rate (business people). Some are the other way around. I don't see that as price fixing, per se. And why tie up a room for a whole week when they can "rent" it out twice a day. |
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