Back to Homepage Income Measures Income: Saving and Investment Methods of Buying That Save Money The Choice of Goods Methods of Buying That Reduce Mistakes In Selection Methods of Securing Information Concerning Goods Plans and Motives of Consumers Consuming the Product Who Is the Consumer? The Consumer in the Market Priorities and Preferences in Consuming Decisions The Consumer as User of Wealth The Consumer as a Buyer Consumers as Self-Conscious Agents Criteria of a Good Market Information Versus Persuasion of the Buyer The Rate of Interest Interest Rates and Economic Activity Saving, Investment, and Income Saving Motives Saving Plans and their Realization Total Spending Is the Key to Prosperity The More We Spend, The More We Have Spending by Private Enterprise

Methods of Buying That Reduce Mistakes In Selection The primary problem of the buyer is ascertaining which among the goods available have the qualities essential for her purpose and which have them to the highest degree. Even if money incomes were unlimited consumers would still be interested in obtaining the article most efficacious for its intended use. The problem of selection takes two forms: (1) identification of the "best" among several articles offered at the same price, and (2) comparison of the relative merits of articles offered at different prices. Unless the buyer is able to make this identification or comparison there can be neither price nor quality competition between goods made by different producers. Furthermore she may choose an article without the qualities most desired or possessing them in less degree than another which is passed by. Mistakes in selection are of two kinds, one, the mistakes that become known to the buyer either through the use of the article or through a careful checking after the purchase has been made, the other, the mistakes that are never known. The buyer may remain ignorant that she has chosen the inferior article, that it is injurious or failing to serve its ostensible purpose as adequately as would another possible choice. Some argue that mistakes of the latter sort do not matter, that so long as the buyer remains in ignorance no loss, economic or otherwise, is sustained. Or it may be said, especially concerning aesthetic qualities, that if she thinks an article possesses them, it does. It is even argued that a mistake of which she becomes aware does not really matter if the seller has cleverly misled her. If it was a clever hoax she got her money's worth. The buyer, it is sometimes said, likes to be fooled; market selection is like attendance at a circus or a magician's performance. These arguments are usually advanced by the defenders of presentday methods of advertising and selling. But in this discussion it will be assumed that the buyer desires to avoid mistakes whether known or unknown and that buying should be as free as possible from guess-work, deception and fraud. If buyers are to select the best article available for a given purpose or purposes they must have information. They must know what qualities to seek and which to avoid. Without this information they can have no basis for judgment. Buying becomes a gigantic grab-bag performance; mistakes are inevitable without the slightest attempt on the part of sellers to coerce or deceive. Ignorance and carelessness are obvious causes of many of the mistakes in selection that surround us. The problem of wise selection must be analyzed still further. In many cases the consumer-buyer has only a vague and general concept of the purpose that the goods sought is to serve and the specific qualities desired are correspondingly vague. Furthermore, many consumers' goods serve several purposes and the comparison of the goods on the market, some of which excel on one point and others on another, becomes correspondingly difficult. Not only are consumers less well-informed buyers than producers but consumers' goods are more difficult to buy than the single purpose, definitely utilitarian producers' goods. It is not enough however that buyers know the qualities to seek and to avoid in the various types of goods. They must also be able to detect the presence or absence of these qualities in the articles offered on the market. It therefore becomes appropriate to ask how they can make this necessary identification and comparison of qualities. The assumption that consumers know the specific qualities of the goods offered for sale lies back of all reasoning in regard to price and the control of production by competitive price. The reasoning is that buyers take the lowest-priced article of a given quality that is offered, or that they take the one of highest quality at a given price. But if they do not know that one article is just as good as another for their purpose or that one is of superior quality the whole line of reasoning breaks down. In fact it sometimes operates in reverse fashion. The article priced at the higher level is chosen on the assumption that it must therefore be of superior quality. The seller, in other words, dare not lower his price unless he can be quite sure that the qualities of the good are known to the buyer. Intelligent comparison of values and price is impossible unless the buyer is able to discover and compare the qualities of goods.   Home