10 ms·

> it's against free market principles, What principle is it against? A buyer and a seller make a mutual agreement or they don't. Due to one time expenses, so

by nullc 11y ago

> it's against free market principles, What principle is it against? A buyer and a seller make a mutual agreement or they don't. Due to one time expenses, some kinds of goods cannot exist without discriminatory pricing. (Where the total income from both low volume high price and high volume low price is required to make the good worth producing.)

michaelt 11y ago
In a perfectly competitive market, the market price is the marginal cost of production. If the market were working as it theoretically should, the upgrade would be free as the marginal cost of the upgrade is nothing.
- wycx 11y ago
  How do you fund R&D in such a market?
asgard1024 11y ago
Not sure if "principle" is the best word, but I wanted to keep the post short. Better would be to say that it's against assumptions which make free markets at least theoretically efficient. The other response to you is correct, and on top of that: When you have discrimination, you're effectively making multiple different "equilibria" on the demand curve (instead of one intersection with supply curve). Once you admit multiple equilibria, all the bets about efficiency (and also fairness) are off. Alternatively you can look at it as follows: The free market can be characterized by existence of market price, on which the participants converge... If you have discrimination, they won't converge on market price and so you don't really have free market (free as in speech). > Due to one time expenses, some kinds of goods cannot exist without discriminatory pricing. I don't think it's true. Linux does exist, for instance.
- tonyedgecombe 11y ago
  Cheap airline tickets wouldn't exist without discriminatory prices, your ticket for $50 bought eight weeks in advance is subsidised by the business traveller who paid $400 the day before travel. Without the discriminatory pricing the flight may not exist for either traveller. With it both travellers are satisfied, you because you get a cheap holiday, the business traveller because he gets to close a big deal.
nhaehnle 11y ago
I find your exchange of comments very nice because it so perfectly illustrates a pet peeve of mine. The assumption "free market = good" is so widely spread and deeply rooted that anything which is identified as "bad" is then assumed to be against "the free market", when really, it is often perfectly aligned with "the free market", and the truth is that "free market = good" is naive. Free markets have good and bad sides; the good tends to significantly outweigh the bad, but unless you recognize that there is some bad in there as well, you're not going to end up with a very good policy mix. One can try to excuse the naive way of thinking by pretending that one is merely using a shorthand, but really, I'm doubtful that that's anything more than an excuse.
- monochromatic 11y ago
  Free market = non-compulsory, voluntary choice. As things go, it's not a bad place to start. Also, what does your comment have to do with the specifics of this discussion?

by nullc 11y ago

michaelt 11y ago

In a perfectly competitive market, the market price is the marginal cost of production. If the market were working as it theoretically should, the upgrade would be free as the marginal cost of the upgrade is nothing.

wycx 11y ago
How do you fund R&D in such a market?

asgard1024 11y ago

Not sure if "principle" is the best word, but I wanted to keep the post short. Better would be to say that it's against assumptions which make free markets at least theoretically efficient. The other response to you is correct, and on top of that: When you have discrimination, you're effectively making multiple different "equilibria" on the demand curve (instead of one intersection with supply curve). Once you admit multiple equilibria, all the bets about efficiency (and also fairness) are off. Alternatively you can look at it as follows: The free market can be characterized by existence of market price, on which the participants converge... If you have discrimination, they won't converge on market price and so you don't really have free market (free as in speech). > Due to one time expenses, some kinds of goods cannot exist without discriminatory pricing. I don't think it's true. Linux does exist, for instance.

tonyedgecombe 11y ago
Cheap airline tickets wouldn't exist without discriminatory prices, your ticket for $50 bought eight weeks in advance is subsidised by the business traveller who paid $400 the day before travel. Without the discriminatory pricing the flight may not exist for either traveller. With it both travellers are satisfied, you because you get a cheap holiday, the business traveller because he gets to close a big deal.

nhaehnle 11y ago

I find your exchange of comments very nice because it so perfectly illustrates a pet peeve of mine. The assumption "free market = good" is so widely spread and deeply rooted that anything which is identified as "bad" is then assumed to be against "the free market", when really, it is often perfectly aligned with "the free market", and the truth is that "free market = good" is naive. Free markets have good and bad sides; the good tends to significantly outweigh the bad, but unless you recognize that there is some bad in there as well, you're not going to end up with a very good policy mix. One can try to excuse the naive way of thinking by pretending that one is merely using a shorthand, but really, I'm doubtful that that's anything more than an excuse.

monochromatic 11y ago
Free market = non-compulsory, voluntary choice. As things go, it's not a bad place to start. Also, what does your comment have to do with the specifics of this discussion?