flat rate pricing / private law

Dave Long (dl@silcom.com)
Tue, 10 Aug 1999 23:12:37 -0700

[dead thread? or just ended suspended?]

> Exactly. And when someone is forced to pay a price for some kind of
> "value" that the parties to the transaction don't actually agree on, but
> which the "buyer" is obligated to proceed with anyway, that's called
> "coercion." Or, sometimes, "theft."

Or, some other times, "flat rate pricing". David Friedman's _Price
Theory: An Intermediate Text_[1] has nice examples in chapters 4 and
10 of how pricing changes when the supply curve isn't nicely smooth.

> I can think of a few ways, some more "civilized" than others. Important
> to note, however, that I'm not particularly arguing against a court
> system or a legal / penal system or other artifacts of state.

Which is what led me to Friedman, who wrote about historical examples:

"Making Sense of English Law Enforcement in the 18th Century"
"Private Creation and Enforcement of Law: A Historical Case"


[1] <http://www.best.com/~ddfr/Academic/Price_Theory/PThy_ToC.html>
> Your demand curve does not show how much you are willing to give for the
> good. On Figure 4-4d, the point X (price = $25/gallon, quantity = 2
> gallons/week) is above your demand curve. But if you had to choose between
> buying 2 gallons of wine a week at a price of $25/gallon or buying no wine
> at all, you would buy the wine; as we will see in a few pages, its total
> value is more than its cost. The demand curve shows the quantity you
> would choose to buy at any price, given that (at that price) you were
> free to buy as much or as little as you chose. It does not show the highest
> price you would pay for any quantity if you were choosing between that
> quantity and nothing.

In this case it would seem that the price of US+TX government is
above your demand curve, but below the price you'll pay for it given
that you're choosing between that bundle and the bundle provided by
the next cheaper regime.