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Thread: The ‘Lemons’ and ‘Plums’ market for photographers in Singapore

  1. #41

    Default Re: The ‘Lemons’ and ‘Plums’ market for photographers in Singapore

    Quote Originally Posted by hori View Post
    • None of the clients know which is which; yet every single photographer knows the precise standard of his photography service

    That one assumption alone is a major flaw. You assume that clients have zero knowledge. This is completely unrealistic because no one hires blind like that.

    So, sorry, if I were marking your work, this would be a fail because you have made a very artificial assumption to make it easy for you to expound on the theory. You would have a more compelling case if you can apply the theory to a situation where clients have some information, with some clients having more information than others.

  2. #42

    Default Re: The ‘Lemons’ and ‘Plums’ market for photographers in Singapore

    I would say the actual market is "alive" and ever changing... although some things will never change (like there will always be bad photographers doing what they do... and majority of of the clients will factor price above everything else... )

    interesting argument, but very flawed due to too much assumptions.

  3. #43
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    Default Re: The ‘Lemons’ and ‘Plums’ market for photographers in Singapore

    Quote Originally Posted by watchthewaves View Post
    That one assumption alone is a major flaw. You assume that clients have zero knowledge. This is completely unrealistic because no one hires blind like that.

    So, sorry, if I were marking your work, this would be a fail because you have made a very artificial assumption to make it easy for you to expound on the theory. You would have a more compelling case if you can apply the theory to a situation where clients have some information, with some clients having more information than others.
    Thanks for the comment. You're correct, complete asymmetric information is not realistic as most of the forummers pointed out in this thread.

    This zero knowledge from the uninformed party is purposely assumed so that the next post (if I get to it) will address how this assumption is mitigated or relaxed through the use of signalling (portfolio, reputation, etc).

    Furthermore, too many realistic factors built into a simple model will render it too complicated to exposit. The idea is to start with a simple model, even with unrealistic assumptions, and work from there by removing or modifying assumptions one by one to make the model more applicable.

  4. #44

    Default Re: The ‘Lemons’ and ‘Plums’ market for photographers in Singapore

    Quote Originally Posted by watchthewaves View Post
    That one assumption alone is a major flaw. You assume that clients have zero knowledge. This is completely unrealistic because no one hires blind like that.

    So, sorry, if I were marking your work, this would be a fail because you have made a very artificial assumption to make it easy for you to expound on the theory. You would have a more compelling case if you can apply the theory to a situation where clients have some information, with some clients having more information than others.
    actually, in many economics models, you have to say things like "zero knowledge" with a straight face, along with things like "all people have perfect foresight". that's how it is.

  5. #45
    Senior Member ovaltinemilo's Avatar
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    Default Re: The ‘Lemons’ and ‘Plums’ market for photographers in Singapore

    This seems like a question testing on demand and supply...but based on the background of photography business market...however, this can only appear in an mcq/short question section coz it definitely must be a simplified approach...this is totally ignoring the bigger market which is turning for the better and consumers preferring quality stuffs over inferior goods since gov says we are expecting "strong growth" (*we shall wait and see*) etc....

    this model juz explains a tiny winy portion of the big picture..take it with a pinch of salt I guess...
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  6. #46

    Default Re: The ‘Lemons’ and ‘Plums’ market for photographers in Singapore

    good analysis but i think you are forgetting that the market, like any market, can be segmented in many ways. plum versus lemon is too high level/simplistic.

    there are several components to consider in your market segmentation. two examples:

    1. product (or in this case, service segment). weddings, corporate, portraits, kids etc. each has different dynamics
    2. customer profile segmentation. simply put, what are the various demographic segments within each product/services category. for example, for wedding photography, there will be customers in the higher income bracket, some in the lower income bracket. they will each have different budgets for their photography needs. or in the product photography segment, a large company like say cold storage would pay more for a photo of a frozen turkey then a small restaurant owner would pay for a photo of his t-bone steak.


    so there is more to it than price and quality. lets take weddings. a lemon photographer will highly unlikely to get into the consideration list of a high income customer, e.g. a high flying banker with 250k a year salary marrying a senior marketing manager with a 150k annual salary. this couple would not flinch at a 2.5k price for their photography (in most cases).

    what about the teacher marrying the clerk? a plum photographer will not likely get into the cosideration list unless he gives big discounts (again, in general, because there will be exceptions, like a friend i have who earns 2k a month with 4 children and tried to buy a 150k car).

    on top of all this, you have the whole marketing game. just because there are high income customers and you are a plum photographer, does not mean they will automatically come to you!

    the point is, while price erosion is a key factor to consider, along with a plethora of lemons photographers flooding the market with cheap deals, it doesn't necessarily mean the market for high priced photography is dead. ibm is still able to sell million dollar mainframes in a market flooded by 600 dollar intel boxes. the coe price is high now, but yet mercs are still flying off the shelf!

    my 2 cents.

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