Anti-Capitalist Sentiment (with some morality)

[BananaStand]

I thought you weren't trying to appeal to morality. Stop using words like "shafted"

Also, your entire analysis assumes that the school administrator has no idea WHY he's unprofitable. Usually analysis of a problem helps determine the best solution. Your whole premise assumes that management is totally blind, and is just throwing the highest +EV darts they can pull out of their asses.

Here on planet earth, it works differently.

1. increase prices - same product with higher price, consumer gets shafted

Why should consumers be totally insulated from price increases? Why is it a "shafting" if a business passes its higher costs on to its customers. Who is doing the shafting here?

2. cut costs - worse product for same price, consumer gets shafted (or in best case no effect, when just trimming excess from the company)

If the cost cuts are targeted at fraud, waste, and abuse, then how does the product get worse? Why is the best case 'no effect'? Is it possible that a more streamlined and efficient business could provide better service?

Maybe I lay off a long-tenured teacher who has accumulated decades worth of salary increases, and then replace him with two entry-level teachers. Two teachers for the price of one would certainly NOT result in shafting of the customer.

In a macro sense, the threat of this practice may motivate more experienced teachers to continuously enhance their skills and increase their value, thus justifying their higher price. In other words, teachers are forced to get better if they wish to continue to prosper.

That's the opposite of shafting the consumer.

3. invest in marketing - same product with higher price, consumer gets shafted

This presumes that the marketing efforts are fruitless. Maybe the marketing attracts new customers. That additional revenue improves profits. The quality of the product, and the price to the individual consumer remain unchanged. Who's getting shafted?

4. invest in product - better product with same price, consumer benefits

In what fucked up reality does a business add costs (invest in product) and not pass that cost on to the consumer? In order for the price to stay the same, the improvements need to attract new customers. If you are willing to stipulate that as a possibility, why won't you recognize that possibility in #3???

How are you assuming that #3 will result in a higher price, but #4 wont. They're both investments that increase costs.

Also, if you add costs, and offer the same price, how are you addressing the profitability problem that caused this debate in the first place?

[MadMojoMonkey]

@Cocco: Whether or not its a school is beside the point, I agree.

1) You're stipulating that increasing prices (and shafting consumers) increases revenue, but that is not a given.
Shafted consumers tend to lose customer loyalty.

2) You're stipulating that selling a worse product for the same price will increase revenue, but that is also not a given.
(see above)

3) is really a corollary of 1) and 2), and could mitigate some lost customer loyalty if the ad campaign is successful, but again, if unsuccessful, then it will not increase revenue.
(Do you like my implicit definition of "successful" in terms of a marketing campaign?)

4) You're stipulating that if your customers like product A, then they will like product A+, and will pay the additional price for it. Again, this is not a given. Better is subjective and the changes you make to your products may not appeal to all of your customers. Furthermore, your customers may simply love your improvements, but cannot afford the additional costs associated with those improvements. They may well decide that their current product is "good enough."

[CoccoBill]

1) You're stipulating that increasing prices (and shafting consumers) increases revenue, but that is not a given.
Shafted consumers tend to lose customer loyalty.

No, I'm just saying that increasing prices is one of the 4 available options a business has when facing competition. I put it at number 1 because, well, you just (theoretically) increase the price and that's it, immediately more money coming in. Clearly you can't just keep doing that, but economically, this option is as good as printing money.

2) You're stipulating that selling a worse product for the same price will increase revenue, but that is also not a given.
(see above)

I'm saying cutting production costs, be it labor, manufacturing, marketing, materials etc. is the 2nd easiest option in the arsenal, and guaranteed profits as long as your product does NOT decrease in quality, and no major extra costs are required to go through with it, such as lengthy company reorgs etc.

3) is really a corollary of 1) and 2), and could mitigate some lost customer loyalty if the ad campaign is successful, but again, if unsuccessful, then it will not increase revenue.
(Do you like my implicit definition of "successful" in terms of a marketing campaign?)

Yup, but I'd say it's the 3rd best option, if just raising prices or cutting costs are no longer an option. Marketing can cost significant amounts of money, take a long time and in no way guarantee you get results. Done right, though, it can be massive.

4) You're stipulating that if your customers like product A, then they will like product A+, and will pay the additional price for it. Again, this is not a given. Better is subjective and the changes you make to your products may not appeal to all of your customers. Furthermore, your customers may simply love your improvements, but cannot afford the additional costs associated with those improvements. They may well decide that their current product is "good enough."

You're of course right about everything you say. Making a better product is typically the most expensive option to increase profits. I would argue that it makes the least sense business-wise, since the other options above are faster, easier, cheaper and less risky. And unfortunately, it also seems to be the only option that actually benefits the customer.

Am I really this bad at explaining, does anyone get what I'm getting at? I do know I hate explaining myself and spelling things out, but I figured the text coming out of my face would at least be intelligible.

[MadMojoMonkey]

No, I'm just saying that increasing prices is one of the 4 available options a business has when facing competition. I put it at number 1 because, well, you just (theoretically) increase the price and that's it, immediately more money coming in. Clearly you can't just keep doing that, but economically, this option is as good as printing money.



I'm saying cutting production costs, be it labor, manufacturing, marketing, materials etc. is the 2nd easiest option in the arsenal, and guaranteed profits as long as your product does NOT decrease in quality, and no major extra costs are required to go through with it, such as lengthy company reorgs etc.

@ first bold: You're still assuming that the businesses' customers are either too stupid to notice that their value is reduced or too loyal to search for other businesses' solutions.

@ second bold: The stipulation that "product does not decrease in quality" is a shift in position from your original stipulation.
If a business can cut costs while maintaining or improving product quality, then that's likely to be win-win. It's not a sure thing, though.
Just because something is an improvement, doesn't mean it's a move to optimal. Competition means that someone else may be able to achieve a more optimal solution than you, even though you've improved.

Am I really this bad at explaining, does anyone get what I'm getting at? I do know I hate explaining myself and spelling things out, but I figured the text coming out of my face would at least be intelligible.

I think we get what you're saying, but you've made too many or too strong of stipulations, which separate your thesis from realistic business scenarios.

[OngBonga]

pigion

haha dear me your spelling is terrible for a teacher.

[MadMojoMonkey]

haha dear me your spelling is terrible for a teacher.

Shut up, nerd!

***
I'm sick AF right now. I'm lucky to have pieced together coherent thoughts, let alone spelled words goodly.

[OngBonga]

Shut up, nerd!

***
I'm sick AF right now. I'm lucky to have pieced together coherent thoughts, let alone spelled words goodly.

No excuse. Typo is an excsue. Say it was a typo.

Goodly is a good enough word whether it exists or not.

[CoccoBill]

Banana, you're talking about something completely different than I am. I'm not interested in figuring out the best business strategy for a school administrator, I'm interested in the incentives created by a market for businesses to improve their profitability. Each of those options come with certain expenses, EV, risk etc. and it seems to me like they can roughly put in 4 categories, of which the "make great products" option seems the least favorable to the businesses.

[BananaStand]

Banana, you're talking about something completely different than I am.

No, I'm not.

You're making totally nonsensical presumptions about the cause and effects of various business decisions. Your assumption about which actions will affect quality or price, in which direction, are very very poorly thought through.

it's entirely possible, and actually quite common, for a business to cut cost and also improve quality by doing so.

It's also entirely possible, and actually quite common, for a business to increase costs (marketing and product development) without increasing price.

You whole argument depends on completely ignoring those entirely plausible and quite common outcomes.

[CoccoBill]

No, I'm not.

You're making totally nonsensical presumptions about the cause and effects of various business decisions.

*whoosh*

[BananaStand]

Speaking of students getting shafted

http://www.foxnews.com/us/2017/04/26...udit-says.html

[Savy]

You seem to be looking at a business in isolation. You're forgetting they have competition.

If you don't make better products and someone else does then they stop buying your product and if they do that you stop existing. If the aim of a business is to make money then going out of business sounds pretty -EV to me.

[CoccoBill]

In isolation of course, since I only want to know what the incentives are. Those incentives of course are just one variable, there are probably a million others. But, if the incentives are to prioritize everything else other than making a better product when facing competition, to me that sounds like a big fucking deal. No, not big enough to destroy the world and make no one ever invest in product quality, but a counterproductive incentive on par with say a government worker not having a profit incentive.

Prove me wrong, that's why I'm here. So far everything has been largely besides the point, show me why increasing product quality is actually a better option or at least on par with the rest.

[BananaStand]

show me why increasing product quality is actually a better option or at least on par with the rest.

They're not mutually exclusive dude!

[CoccoBill]

They're not mutually exclusive dude!

Of course not, and they don't have to be. It's enough that there's a stronger incentive to try everything else rather than making a better product. I'd say already a few percent decrease in research investments compared to a market without said incentives would be significant, and all out of the pocket of the consumer without added value to them. I'm wondering if it might actually be way more than that.

[MadMojoMonkey]

Prove me wrong, that's why I'm here.

lol

People.

SMH

***
Your exact meaning of "in isolation" has not been defined, yet.

Any definition of "in isolation" which allows me to agree with your statements is divorced from a real business run by real people. Businesses can't exists in isolation of customers, even if they can exists in isolation of competition.

The assumption that customers are a static commodity, unrelated to the quality/cost of the businesses' products is my real issue with your assertions.

[BananaStand]

The assumption that customers are a static commodity, unrelated to the quality/cost of the businesses' products is my real issue with your assertions.

Despite his denials, he is clearly trying to look at things from the perspective of a privately run school. In that case, the customers are somewhat of a static commodity. Everyone has to go to school. And "everyone" is a finite number.

[BananaStand]

I don't think you know what mutually exclusive means.

You're not allowing for the common occurrence where a cost cutting measure results in a superior product.

[CoccoBill]

I don't think you know what mutually exclusive means.

You're not allowing for the common occurrence where a cost cutting measure results in a superior product.

Me: What's better, bananas, apples or oranges?

Banana: I like both bananas and oranges! Why do I have to pick one?

[BananaStand]

Me: What's better, bananas, apples or oranges?

Banana: I like both bananas and oranges! Why do I have to pick one?

That's a retarded analogy. If you decide you like apples best, it doesn't affect the quantity or behavior of the other two fruits.

In business many different operational forces interact with each other.

[Jack Sawyer]

http://www.cnbc.com/2017/07/14/roger...aboolainternal


Relevant story


If those kids would be earning $7.25 an hour ...

[a500lbgorilla]

http://www.cnbc.com/2017/07/14/roger...aboolainternal


Relevant story


If those kids would be earning $7.25 an hour ...

Devil's avocado for a moment.

Why do either of us know about Roger Federer?

[Jack Sawyer]

More goodness

As we detailed in a feature last year, Comcast doesn't have a meter in each customer's home to measure data usage. Instead, Cable Modem Termination Systems (CMTS) in Comcast facilities count the downstream and upstream traffic to and from each subscriber's cable modem.Though Comcast lets customers check Comcast's measurement totals online, it doesn't provide any way for customers to verify whether the meter readings are accurate. Customers who measure their own usage with tools such as DD-WRT and OpenWrt are routinely told by Comcast that only Comcast's meter provides an accurate reading.
Comcast has admitted mistakes in some cases, but it's nearly impossible for regular customers to challenge Comcast's data usage claims. Comcast CEO Brian Roberts has claimed that Internet data is just like electricity and gasoline and that customers who use more should pay more. But with traditional utilities, government regulation ensures that prices are fair to consumers and that meter readings are accurate. There are no comparable safeguards with Comcast's data charges and usage meter.

Thoughts?

https://arstechnica.com/information-...ancel-service/

[a500lbgorilla]

More goodness




Thoughts?

https://arstechnica.com/information-...ancel-service/

Changing the rules is always an effective tact. But sometimes you have to let life breathe.

[wufwugy]

Price controls *can* allow for current quantity and quality of goods and services by a given distribution of producers over a given distribution of consumers to be "fair," though even this does not maintain since societal conditions are not in stasis. Price controls deter the signaling to producers and consumers regarding how to most productively allocate their resources that grows quantity and quality so that more people can have more and better goods and services.

[Jack Sawyer]

Price controls *can* allow for current quantity and quality of goods and services by a given distribution of producers over a given distribution of consumers to be "fair," though even this does not maintain since societal conditions are not in stasis. Price controls deter the signaling to producers and consumers regarding how to most productively allocate their resources that grows quantity and quality so that more people can have more and better goods and services.

And I do agree with you on that




However, I also think that there are exceptions to this rule as with everything in life. While theoretically it *should* work everywhere, I cannot see every industry as exactly equal in the today’s real world.

And particularly ISPs are one of those exceptions

[wufwugy]

And particularly ISPs are one of those exceptions

What, in your estimation, makes ISP an exception?

[Jack Sawyer]

What, in your estimation, makes ISP an exception?

For starters, the traditionally small amount of "competitors" due to that market having very high natural and artificial barriers of entry

[wufwugy]

For starters, the traditionally small amount of "competitors" due to that market having very high natural and artificial barriers of entry

While there are natural barriers to entry in ISP, the causative factors for why there isn't sufficient competition such that deters one firm's market power (ability to set price) are artificial barriers (largely restrictions by municipal governments). It's tough to say exactly how much natural barrier to entry there is in ISP, but we do know that competition is arising where the artificial barriers are low enough. Apparently there are a lot of small ISPs that are jumping in and taking business from the big incumbents.

ISP is definitely not one of the markets I'm worried about even with its super high artificial restrictions. There are a wide variety of ways for firms to make money in the market and there are many other markets that provide substitutes.

[a500lbgorilla]

And I do agree with you on that




However, I also think that there are exceptions to this rule as with everything in life. While theoretically it *should* work everywhere, I cannot see every industry as exactly equal in the today’s real world.

And particularly ISPs are one of those exceptions

Yeah, work produces sweat which is the best of its pollutants.

[Jack Sawyer]

So why does the black market exist? Why is my weed consistently good quality?


Sometimes, crap quality weed hits the market. It's rare, because the person who sold it will lose customers as a consequence. That's why most dealers I know will reject crap quality weed.


Despite being an unregulated market, cannabis dealers effectively regulate themselves for their own business interests.

Going back to my point above

While theoretically it *should* work everywhere, I cannot see every industry as exactly equal in the today’s real world.

But still, I’ll try to give you some play. Is there like a baseline? Like a weed review? Weed Times Magazine? Can you consistently say that a certain weed is better than another one? Like the one in Savages? Or is it about taste? Are you sure that the weed you have access to is not soundly crushed by various weeds from somewhere else? Some other manufacturer?


I don’t know, because I don’t smoke. Not even cigarettes. I never really had any interest in smoking crap.


I do have interest in internet access though

[wufwugy]

I do have interest in internet access though

Keep in mind that it is because of the price system that you have internet access in the first place, and also why what you will have in the future will be better.

[CoccoBill]

When medical doctors have to compete for their customers, they tend to give the treatments and tests that their customers want, rather than what they need or what would be cost-effective.

[wufwugy]

When medical doctors have to compete for their customers, they tend to give the treatments and tests that their customers want, rather than what they need or what would be cost-effective.

Do customers not also want what is most cost-effective?

[Jack Sawyer]

Do customers not also want what is most cost-effective?

IME they just want their health. While dying, you tend to not think about money

[wufwugy]

IME they just want their health. While dying, you tend to not think about money

This change of preference is very true, and it is not involved with any shift away from seeking the most cost-effective option.

Even when unhealthy and dying, a $3000 treatment with 30% rate of success is preferred to a $3000 treatment with 25% rate of success. Given those parameters, the unhealthy and dying patient will choose the more cost-effective option (the one with 30% success rate). In fact, according to fundamental economic theory, patients will ALWAYS choose the most cost-effective treatment given their perceptions and preferences.

There are a bunch of things to discuss regarding problems in healthcare, but it is not the case that a patient will ever say "hey doc give me the least promising, more expensive treatment" (unless his preference is to get sicker or to waste money or something like that).

[a500lbgorilla]

This change of preference is very true, and it is not involved with any shift away from seeking the most cost-effective option.

Even when unhealthy and dying, a $3000 treatmen...

:^)

[a500lbgorilla]

IME they just want their health. While dying, you tend to not think about money

IME = In My Estimation?

Yes, when it's all laid bare and you're leaving this world, and those that gravitated toward you leave you because they abhor your degenerative weakness, you will remember what you left - and what you left better be for the living.

[Jack Sawyer]

IME = In My Estimation?

In my experience

[CoccoBill]

Do customers not also want what is most cost-effective?

With insurance, why would they? The point isn't that they'll want a less cost-effective treatment over a more cost-effective one, they'll want every test imaginable, whether they're even relevant or remotely helpful, since if you don't prescribe them, I'll find someone who does.

[wufwugy]

With insurance, why would they? The point isn't that they'll want a less cost-effective treatment over a more cost-effective one, they'll want every test imaginable, whether they're even relevant or remotely helpful, since if you don't prescribe them, I'll find someone who does.

You're right. It's a big problem in second-party and third-party payment systems.

Insurance is a second-party payment system. Government is a third party payment system. First-party is what we want, third-party is the least efficient.

It is likely that most health insurance would go by the wayside without government involvement. Most of the healthcare system naturally works well as a first-party payment system, but government policies have basically made it where the only viable kinds are second and third party payments.

[Jack Sawyer]

You're right. It's a big problem in second-party and third-party payment systems.

Insurance is a second-party payment system. Government is a third party payment system. First-party is what we want, third-party is the least efficient.

So what is first-party? Out of pocket payment for treatment?

[a500lbgorilla]

Do customers not also want what is most cost-effective?

Most comfortable, imo.

People can't worry about everything. You check in with the guy that understands your organs, you want him to tell you your organs in shape.

[wufwugy]

Most comfortable, imo.

People can't worry about everything. You check in with the guy that understands your organs, you want him to tell you your organs in shape.

That too.

Economists don't think of (or at least try not to) costs as just dollar costs, but opportunity costs and baked into utility (preferences). Conceptually, it is appropriate to "price" comfort in terms of dollars even though it typically isn't in practice. If in the hypothetical I constructed, the lower probability success treatment carries with it greater comfort due to something like the type of treatment it is such that the patient chooses it, it means that the 'true" cost to that treatment in the eyes of the customer was the lowest of available options.

[a500lbgorilla]

When medical doctors have to compete for their customers, they tend to give the treatments and tests that their customers want, rather than what they need or what would be cost-effective.

Yeah, because everyone has an entire life to live. They have kids and interests and desires...

If you can punch through someone with great insurance, why not?

[wufwugy]

The biggest natural monopoly I know of is airlines, and even they have enough competition naturally that their biggest problems are artificial restrictions.

As far as I can tell, voters and politicians and bureaucrats don't make decisions based on what is best for the industry and producers/consumers/laborers/entrepreneurs but based on how they feel or what directly lines their individual pockets. Airlines just *seems* like something that needs a bunch of regulations to most people, so it gets a bunch of regulations, which have distorted the industry significantly and caused loads of problems and greater costs.

Other industries get very little artificial restrictions because they just don't seem like they need them, yet those industries can still have very big natural monopoly attributes while still having robust competition and servicing of the customer's desires. Smart phones are a good example of that.

My point here is basically that most people think they apply their preferences for regulation in different areas based on reason, but I'm saying they don't and instead it's more about familiarity or false intuition. Why do people think government should own roads? Probably because that's what people are used to. Why do people think government shouldnt own farms? Probably because that's what people are used to.

[wufwugy]

I may be wrong in calling insurance strictly second-party payment. It seems to be a pseudo-second-party or pseudo-third party payment system.

[OngBonga]

Ronaldo doesn't insure his legs. Real Madrid (his employer) do. They're the ones who invested over £100m in him. Likewise, Kim's arse will be insured by her record label.

[OngBonga]

Take away the rules, take away the regulations, and instant destruction happens

So why does the black market exist? Why is my weed consistently good quality?

Sometimes, crap quality weed hits the market. It's rare, because the person who sold it will lose customers as a consequence. That's why most dealers I know will reject crap quality weed.

Despite being an unregulated market, cannabis dealers effectively regulate themselves for their own business interests.

[wufwugy]

So why does the black market exist? Why is my weed consistently good quality?

Sometimes, crap quality weed hits the market. It's rare, because the person who sold it will lose customers as a consequence. That's why most dealers I know will reject crap quality weed.

Despite being an unregulated market, cannabis dealers effectively regulate themselves for their own business interests.

The term "black market" is misleading because it can seem like it is not regulated yet in fact the market is highly regulated. Economics thinks of markets in terms of goods and services (or labor or financial products, etc.). So, regarding marijuana, it would be the marijuana market, which is an intensely regulated market, so much so that most types of transactions are strictly illegal. Within this marijuana market, transactions that bypass the regulations do happen, which is where the idea of "black market" comes from. We should be sure to not think of this meaning that it is unregulated because the secret transactions of marijuana are a product of the intensely regulated marijuana market.

Markets that are so intensely regulated that secret transactions are common tend to have costs that are many multiples greater than they otherwise would be. I looked at some numbers a while back and it appears that if marijuana was as legal and unrestricted as wheat, an ounce of top quality weed could be like ten cents or some crazy low price.

[Jack Sawyer]

Markets that are so intensely regulated that secret transactions are common tend to have costs that are many multiples greater than they otherwise would be. I looked at some numbers a while back and it appears that if marijuana was as legal and unrestricted as wheat, an ounce of top quality weed could be like ten cents or some crazy low price.

Yup, and the cartels DON'T want this

Which is why "good people don't smoke marijuana"

[OngBonga]

Ronaldo doesn't insure his legs. Real Madrid (his employer) do. They're the ones who invested over £100m in him. Likewise, Kim's arse will be insured by her record label.

I'm probably wrong actually. I'd imagine both Ronaldo and Madrid insure his legs.

[Jack Sawyer]

I'm probably wrong actually. I'd imagine both Ronaldo and Madrid insure his legs.

Oh ok

[OngBonga]

Oh ok

Yeah I mean Real paid a then world record fee for Ronaldo, and of course his salary is huge, they have to protect their investment. Of course they insure their players. But obviously Ronaldo will need to insure himself too, because he's only contracted to Real for a fixed term, while his career might be longer.

I didn't really think my comment through.

[Jack Sawyer]

Ronaldo doesn't insure his legs. Real Madrid (his employer) do. They're the ones who invested over £100m in him. Likewise, Kim's arse will be insured by her record label.

You sure about this?

[Jack Sawyer]

I want to expound on this, in part because it gets at a concept very useful for life that is at the heart of economics: marginalism.

A response to what I said in the quoted, which is a response I've gotten here before, is "but if you have to use your internet to run your business, you don't have substitutes." For our intents and purposes, that is true. You DO have substitutes, but they are costly enough that we can assume you don't have substitutes. BUT people using ISP to run their businesses are not the only part of the equation. ISPs have a bunch of different customers with a bunch of different preferences and different changes in marginal behavior based on changes in ISP's inputs. Example, if an ISP racks up its price, the internet-business-operator takes it on the chin and wrings his hand. He gets screwed. BUT the family down the street who uses the internet for email only, they may then drop the cable ISP and use only their smart phones for internet. Another example, maybe the ISP decides to throttle too much. Maybe this screws over the internet poker player, but down the street may be a family that only has high speed internet because their son games, and maybe he's the kind of kid who likes playing with legos and outside in the woods a lot and after enough frustration with getting throttled while playing Diablo 3 he decides it is more worth his time to stop gaming and do those other things. Then his family drops the high speed internet because they're no longer using it.

In each scenario, the ISP's "bad" behavior may gain it money from the poor schmuck who runs his business on the internet, yet the ISP could still lose by net due to losing revenues from others who were also affected and were marginally attached to their consumption of the ISP's product. This is how the internet-business guy won't get screwed over, because the ISP will make decisions based on its marginal gains and marginal losses, which it gets from the customers and revenues on its margins.

This essentially exemplifies the most profound concept in all economics: Adam Smith's invisible hand.* Even when the internet-business guy depends on the ISP to not behave badly, the ISP depends on its marginal customers to keep making profits, which means that it is because of the internet-business guy's neighbors that are marginal customers of the ISP that internet-business guy gets a good product from the ISP.


*The invisible hand is essentially a description of how people acting in their own self-interest in voluntary transactions makes society better for all.

Yup, theoretically.

And meanwhile, back in Gotham

https://motherboard.vice.com/en_us/a...s-after-harvey

Trump’s FCC Will Let Big Telecom Destroy Small Houston ISPs As It Rebuilds After Harvey: The FCC has rules in place to prevent Big Telecom from leaving local competitors in the lurch, but it’s currently scrapping those rules.

Take away the rules, take away the regulations, and instant destruction happens.

I can see some irony in there among economic theory and the law of unintended consequences

[wufwugy]

Yup, theoretically.

And meanwhile, back in Gotham

https://motherboard.vice.com/en_us/a...s-after-harvey



Take away the rules, take away the regulations, and instant destruction happens.

I can see some irony in there among economic theory and the law of unintended consequences

Earth is cooling because it snowed outside.

[Jack Sawyer]

Earth is cooling because it snowed outside.

I think I heard this argument literally on fox news and many other right-wing news sources before

Edit: Yup

http://www.cc.com/video-clips/r8c9ac...-war-on-carbon

[Jack Sawyer]

I'm probably wrong actually. I'd imagine both Ronaldo and Madrid insure his legs.

Here

https://healthyceleb.com/top-6-body-...e-insured/4813

https://www.msn.com/en-au/entertainm...rts/ss-BBeQonq

Fun fact: apparently Real did though. Still example is valid as others have done their own insuring; it's a possibility if you want, need and have the resources

J-Lo's ass is $27M? Holy shit, now that would be one hell of an anal

[OngBonga]

Can you consistently say that a certain weed is better than another one?

Sure I can. I've been smoking the shit for over 20 years now, I know quality weed when I smoke it.

That said, I'm in no doubt that American weed will be, on average, better than British weed. Why? Because it's legal. Those who grow it here are, by the very nature of cannabis law, criminals. You're not going to get someone quit their job as a science teacher to grow weed. In USA, growers could be deeply intelligent experts who understand plant biology before getting involved with weed. People like mojo, rather than people like me. Also, investment is higher, better quality equipment, because there's no need to hide it from authorities.

That said, there's no reason why it's not possible to match American standards in the UK. It's just harder and more expensive.

I can argue this is evenidence of deregulation (in the form of decriminalisation) improving the quality of a product. Of course, you can counter that American weed is more regulated than British weed (license, quality control, permitted fertilisers etc) and that's why the quality is better. I don't think so, but I can't be sure. I can still find quality weed that is comparable to the best American weed, it's just harder to get hold of and more expensive. The obstacle to overcome is regulation in the form of law, that's what's making it rare and expensive.

[Savy]

Do you think the principles behind buying in bulk & getting a discount apply to insurance in the same way?

[OngBonga]

Do you think the principles behind buying in bulk & getting a discount apply to insurance in the same way?

Not in the same way because one is a product whereas the other is a service. However, insurance is kinda like the bookies, where the more people they insure, the less probability they have of making a losing bet. Insurers are essentially betting you don't break your leg or whatever. So yeah, bulk is still good for their business, and therefore lower cost for the consumer.

[Savy]

Not in the same way because one is a product whereas the other is a service. However, insurance is kinda like the bookies, where the more people they insure, the less probability they have of making a losing bet. Insurers are essentially betting you don't break your leg or whatever. So yeah, bulk is still good for their business, and therefore lower cost for the consumer.

So they aren't (I agree).

[wufwugy]

Do you think the principles behind buying in bulk & getting a discount apply to insurance in the same way?

Buying in bulk benefits due to efficiency gains in higher production and distribution. It's something like a factory can make 100 widgets at $10 a piece or 1000 widgets at $9 a piece. This type of thing happens for a variety of reasons that include specialization of labor and cost of machinery.

"Discount" to insurance comes when in a large, varied pool because the insurance company takes on less risk. Imagine one company that insures everybody who works at Microsoft versus another company who insures the same quantity of people but they all have diabetes. One of those scenarios is vastly more expensive for the insurance company and thus for the consumer.

[Jack Sawyer]

Buying in bulk benefits due to efficiency gains in higher production and distribution. It's something like a factory can make 100 widgets at $10 a piece or 1000 widgets at $9 a piece. This type of thing happens for a variety of reasons that include specialization of labor and cost of machinery.

"Discount" to insurance comes when in a large, varied pool because the insurance company takes on less risk. Imagine one company that insures everybody who works at Microsoft versus another company who insures the same quantity of people but they all have diabetes. One of those scenarios is vastly more expensive for the insurance company and thus for the consumer.

Yes, but it doesn't work that way. Ideally you should be on insurance *before* you get diabetes, so that when you happen to get (the chance thing ong was talking about) you can deal with it in a more humane way.

Paul Ryan was like: "it's not fair for the healthy to pay for the sick". Needless to say, this saying is not only heartless, but also stupid

[wufwugy]

Yes, but it doesn't work that way. Ideally you should be on insurance *before* you get diabetes, so that when you happen to get (the chance thing ong was talking about) you can deal with it in a more humane way.

Paul Ryan was like: "it's not fair for the healthy to pay for the sick". Needless to say, this saying is not only heartless, but also stupid

Paul Ryan is a stupid tool.

[OngBonga]

Well yeah just like rubgy and football aren't the same, so tactics for one sport don't necessarily apply to the other. Doesn't mean tactis are useless for one of the two.

I'm not sure what point you're trying to make, other than stating the obvious in that one is a service while the other is a product, meaning there are obvious and profound differences between the business models.

[OngBonga]

The point I'm making is that regardless of whether it's a service or a product, bulk is good for both, and results in lower costs to the consumer. How those lower costs come about differs from business to business, not just from sector to sector.

[CoccoBill]

https://www.theatlantic.com/ideas/ar...market/600859/

[MadMojoMonkey]

https://www.theatlantic.com/ideas/ar...market/600859/

What are you going to do about it, though?

[OngBonga]

Consume less.

[CoccoBill]

I remember well paying highway robbery prices for internet back in the late 90s here, while similar and faster connections were available in the US for cheaper. Now I pay $45/mo for gigabit fibre and about $22/mo for 200Mbit cellular, both unthrottled and unlimited. My understanding is both of those cost several times more in the US now, with very limited availability. Something's changed quite a bit.

I'm no economist, but it would make sense to a layman's ears that antitrust regulations could enable competition.

[wufwugy]

antitrust regulations could enable competition.

They can (and do). What's the cost?

[CoccoBill]

Nobody seems to know, but without a doubt there are some, depending on how the regulations are implemented. According to research it does seem though that at least in the US and the Netherlands the benefits outweigh the costs:

"The analysis showed, first, that competition is typically desirable. Second, it was found that without antitrust policy, firms could and would (permanently) exercise market power to the detriment of overall welfare as well as consumer welfare.

Subsequently, an estimation of the costs and benefits of antitrust enforcement suggested - at least for the United States and the Netherlands - that the realised benefits overtop the realised costs by far as long as overcharges/redistribution effects and deadweight losses are considered as welfare loss. However, under a total welfare approach, only the avoidance of deadweight losses can be considered as benefit of antitrust policy and then, the benefits estimated for cartel and merger enforcement under a disaggregate approach weren’t able to cover the derived cost estimate for the United States and the Netherlands. However, it should be kept in mind that the deterrence effect as an important benefit of antitrust laws and enforcement didn’t enter the quantification. Generally, it has to be reminded that some cost and benefit components can hardly be measured with satisfactory accuracy."

http://ftp.zew.de/pub/zew-docs/dp/dp08107.pdf

Conclusions on page 35.

[wufwugy]

Nobody seems to know,

Quantification is limited to modeling that shows a portion of effects.

but without a doubt there are some, depending on how the regulations are implemented. According to research it does seem though that at least in the US and the Netherlands the benefits outweigh the costs:

"The analysis showed, first, that competition is typically desirable. Second, it was found that without antitrust policy, firms could and would (permanently) exercise market power to the detriment of overall welfare as well as consumer welfare.

Subsequently, an estimation of the costs and benefits of antitrust enforcement suggested - at least for the United States and the Netherlands - that the realised benefits overtop the realised costs by far as long as overcharges/redistribution effects and deadweight losses are considered as welfare loss. However, under a total welfare approach, only the avoidance of deadweight losses can be considered as benefit of antitrust policy and then, the benefits estimated for cartel and merger enforcement under a disaggregate approach weren’t able to cover the derived cost estimate for the United States and the Netherlands. However, it should be kept in mind that the deterrence effect as an important benefit of antitrust laws and enforcement didn’t enter the quantification. Generally, it has to be reminded that some cost and benefit components can hardly be measured with satisfactory accuracy."

http://ftp.zew.de/pub/zew-docs/dp/dp08107.pdf

Conclusions on page 35.

He does a good job of showing the effects when modeling a slice of the whole.

Thanks. That was fun. I haven't seen the phrase deadweight loss in a while.