A deal’s (not) a deal

What do a New York internist and the government of India have in common?  They both experienced price increases after a purchase.

In the internist’s case, the NYT suggests that his College Park MD hotel may have “lost” his $89 a night reservation when it realised it could sell it for more due to the inauguration.  In India’s case, the Russians are trying to make them pay a couple of billion more for the aircraft carrier Gorshkov.

If you’re prepared to pay $100 for something, then you’re probably prepared to pay an extra 10% on top of that.  So how come we don’t see this more often?  Besides the legal reasons, it annoys people so much there’s a risk of their acting irrationally, and it means that others no longer trust your prices.  So it’s not something to do if you want to build a relationship.

With that in mind, are the Russians that short of money that they would risk a rift in their partnership with India?  Apparently so.  But now that we’re in a post-ideological age, they should be careful.  If I were selling U.S. weapons, I would make sure my prospects were thoroughly familiar with the story of the Gorshkov, and stress how Americans, for all their faults, understand that a deal’s a deal.  And if you can’t trust an international arms trader, who can you trust?


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