Caveat emptor

That the buyer should beware is something most people know. Even in countries where you have a lot of consumer rights it is not always enough to protect the public from unethical people but that is not what this post is about. In this post buyer and seller as well as all innocent bystanders are assumed to act ethical, in the normal sense of the word.

When writing about this I regret that I do not know anything about economics because I find this an interesting and important aspect of how business is conducted and I am sure it has been studied. Probably there are a number of dissertations and papers on this that I have not read. But then again I am only a stupid uneducated scientist and magician not an economist.

As an example I will take public transport and how you decide what payment system to use. I guess that it is a good idea to have someone that have studied economics to compare different systems, how much the system will cost initially, how many that will avoid paying for the public transport by bypassing the system, the maintenance cost, personnel cost etc. There are probably many more variables that will be important. And I am no expert when it comes to public transportation or economics, but I do think I know a thing or two about people.

I have some ideas about what can influence the choice so that it is perhaps not the least expensive and most manageable system that is chosen. I think this was the case when they decided in Stockholm what system to use.

Having been to Vienna and having lived in Prague I consider their payment systems to be among the best I have experienced. And I also think that I know why it would never make it in a competition with for example the system they have in Paris.

There are no expensive machines in the Viennese system or the one in Prague and that is why they are less likely to be chosen by someone that has to invest a lot of money in a new payment system.

I do not know how much personnel the system in Paris requires compared to the systems in Vienna or Prague. The cities are not of the same size and not all the people that work within the public transport system are concerned with the payment system. But I do know that the system they have in Paris and Stockholm is less practical from a user perspective. In Prague or Vienna if you have your ticket you can get on and of trams and busses, in and out of the subway without taking the ticket out of your pocket and without any gates or detectors.

The reason why I think that a system like the one in Vienna or Prague is less likely to be chosen when someone is deciding on a new payment system is that no one is selling the system. There is no large investment in machines and thus there is no company spending money on selling the system. Sure there are som machines that you can buy tickets from set up in the subway stations but that is it.

The people selected to try to find a new payment system do not have to be taking bribes for the influence from the big companies to be a factor. Persuasion is a very important tool to make people do something. Companies with large budgets have more money to try to persuade people to buy their products. The simple system has no one that speaks up for it and I think that will make a huge difference. People do not always care so much about the hard facts, the comparison of how much the system will cost initially, how many that will avoid paying for the public transport by bypassing the system, the maintenance cost, personnel cost etc. People care about what other people tell them, and if there is no one that speaks up for the better system it will probably not be chosen.

It would be very interesting to learn if this hypothesis of mine have been tested and what the result was.