Prolijo wrote:
Bilko,
(...)However, the example numbers you gave are just that - examples - and you provided no proof or logic to show that the market would really work that way in ACTUALITY if/when it is ever put into PRACTICE. Regardless of what some chicas BELIEVE (or can manage to understand because lowering prices to make more money is naturally counterintuitive) it is just as possible that the opposite is try - that prices are actually elastic and a relatively small drop in price can lead to a relatively large increase in business that can more than make up for it.
Speaking just for myself(...)
I am not an economist and just thinking out loud here. I wasn't trying to prove a new economic theory. I am giving my best shot of explaining something that I have been asked over and over.
Now, as far as you PERSONALLY go, in your negotiations, etc, I agree that individual girls who take less (given equal quality, whatever that is) will have more customers. 3 at $70 will yield more than 2 at $200.
But my point was that on a group level, the 'customer' pool has been reduced by 3, not 2. The customer pool has a limit, that is, there are a limited number of sessions in whatever group of mongers is out there. It's almost like a strike breaker. He (she) can do better than those who are holding out for a higher wage, but when the strike is all over and the new lower wage becomes the norm, combined income is down. I don't say that the girls are consciously thinking this way, but I do believe that they understand that if it comes down to a price war, they all lose. All the other reasons (and some more mentioned by others, and some more we probably haven't even thought of) go into their behavior. I am explaining the behavior not trying to spread economic theories. It doesn't matter if my theories of economics are right or wrong. If a girl acts from her perception of economics then that's what's happening. If you invest stocks based on your belief in Ron Paul and Peter Schiff, then you profit or lose regardless of whether you are right or wrong.