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#1 What do restaurant prices tell us about the cheap talk?

#1 What do restaurant prices tell us about the cheap talk?
Menu Prices, Innovation, and Cheap Talk


There is a lot of talk these days about sentiment mining and using it for understanding markets. It needs to be done too as the cascading Crypto crisis has been made abundantly clear. Though, it is not novel. Let me illustrate with menu prices.

Pret A Manger (pronunciation apologies in advance to Louise, and Nabih) added lobster roll to its menu in 2019. In the UK they cost $7.31, and in the US $ 9.99. The lobsters are closer by in the US than in the UK. Labour and Rent one can argue are similar in London, and New York.

So what explains the difference in prices? The unique feature of prices is relative rather than absolute. Restaurants charge an amount that users would not mind paying in their premises, and it is ascertained on a broad spectrum of willingness to pay in the market condition.

It is largely subjective rather than scientific. The pricing of any product is largely an experiment in psychology than relative experimentally determined by folks in a white coat. This is where BE can be fascinating to look at financial products with a little more scrutiny.


Restaurants that run contrary to sentiments add to the large pile of market corrections aka bankruptcy that allows you to enjoy a morning cup of coffee at a price of your convenience.


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