5 ms·

Wow, uncanny resemblance to Giffen goods: https://en.wikipedia.org/wiki/Giffen_good https://en.wikipedia.org/wiki/Giffen_good

by wyc 10y ago

kevinwang 10y ago
How so? I don't really see the similarity
- brownbat 10y ago
  Both describe unexpected effects when trying to extrapolate from price and quantity involved in individual use cases. Jevons: Quantity required per use goes down, so you might expect total demand to decrease. Instead total consumption goes up. Giffen: Price per use goes up, so you might expect total demand to decrease. Instead, total consumption goes up. Either could increase consumption by displacing available substitutes, though that's not necessarily the case with Jevons. They are indeed different phenomena, they just have some similarities.
  - nannal 10y ago
    And now with both of those things Baader-Meinhof is going to be triggering every hour for the next month at least
    - wolfgke 10y ago
      > And now with both of those things Baader-Meinhof is going to be triggering You know that Andreas Baader and Ulrike Meinhof were the main founders of the terrorist organization RAF (Rote Armee Fraktion (Red Army Fraction)) in Germany. RAF was also the reason that grid investigation was used in the 70th (where lots of innocent people were accused wrongfully) after a RAF terror series, after which some constitutional principles were quashed. The German word for this is "Deutscher Herbst" (German Autumn; https://en.wikipedia.org/wiki/German_Autumn https://en.wikipedia.org/wiki/German_Autumn). These experiences lead (indirectly) to the rise of a completely new party (Die Grünen; The Green Party) and are (besides the experiences with the two dictatorial regimes on German ground in 20th century) one of the reason why data privacy is taken very seriously in Germany. Thus mentioning RAF, Andreas Baader or Ulrike Meinhof to (in particular older) Germans is perhaps like mentioning Al-Kaida, 9/11, Mohammed Atta etc. to US citizens.
      - nannal 10y ago
        So triggering^2
yoz-y 10y ago
From the wikipedia article I gather that the only Giffen goods that were actually shown to exist are the Veblen goods and thus disqualify as Giffen goods. It seems to me that Giffen goods are a theoretical thing that has never been actually shown in real world (as the article states, all of the proposed examples were discarded). The case of website cost going down and demand going up seems pretty standard.
- lmm 10y ago
  How are you distinguishing between Giffen and Veblen goods? If you define Veblen in such a way that all Giffen goods are Veblen and then say that disqualifies them then of course you'll find there are no Giffen goods.
  - yoz-y 10y ago
    According to the article: > To be a true Giffen good, the good's price must be the only thing that changes to produce a change in quantity demanded. A Giffen good should not be confused with products bought as status symbols or for conspicuous consumption (Veblen goods) Veblen goods = Goods for which demand rises with price because they are status symbols Giffen = Goods for which demand rises with price - Veblen Goods However there are no examples there that hold, to me this signifies that the only goods for which the law of demand does not apply are status symbols.
    - JangoSteve 10y ago
      Isn't a Giffen good then just something where one infers quality from price? I've seen that happen many times with my own eyes, so hard to believe they've never been identified. It's possible to price something so cheap, people assume there's a catch.
      - chimeracoder 10y ago
        > Isn't a Giffen good then just something where one infers quality from price? No, it's an inferior good (in the economic sense) in which the (negative) income effect of a price increase outweighs the success substitution effect. What you are describing is a good that has a positive elasticity of demand with respect to income (or, technically, two different goods, because the higher price represents a different good altogether - one with a higher status symbol).

Wow, uncanny resemblance to Giffen goods: https://en.wikipedia.org/wiki/Giffen_good https://en.wikipedia.org/wiki/Giffen_good

by wyc 10y ago

Wow, uncanny resemblance to Giffen goods: https://en.wikipedia.org/wiki/Giffen_good https://en.wikipedia.org/wiki/Giffen_good

kevinwang 10y ago

How so? I don't really see the similarity

brownbat 10y ago
Both describe unexpected effects when trying to extrapolate from price and quantity involved in individual use cases. Jevons: Quantity required per use goes down, so you might expect total demand to decrease. Instead total consumption goes up. Giffen: Price per use goes up, so you might expect total demand to decrease. Instead, total consumption goes up. Either could increase consumption by displacing available substitutes, though that's not necessarily the case with Jevons. They are indeed different phenomena, they just have some similarities.
- nannal 10y ago
  And now with both of those things Baader-Meinhof is going to be triggering every hour for the next month at least
  - wolfgke 10y ago
    > And now with both of those things Baader-Meinhof is going to be triggering You know that Andreas Baader and Ulrike Meinhof were the main founders of the terrorist organization RAF (Rote Armee Fraktion (Red Army Fraction)) in Germany. RAF was also the reason that grid investigation was used in the 70th (where lots of innocent people were accused wrongfully) after a RAF terror series, after which some constitutional principles were quashed. The German word for this is "Deutscher Herbst" (German Autumn; https://en.wikipedia.org/wiki/German_Autumn https://en.wikipedia.org/wiki/German_Autumn). These experiences lead (indirectly) to the rise of a completely new party (Die Grünen; The Green Party) and are (besides the experiences with the two dictatorial regimes on German ground in 20th century) one of the reason why data privacy is taken very seriously in Germany. Thus mentioning RAF, Andreas Baader or Ulrike Meinhof to (in particular older) Germans is perhaps like mentioning Al-Kaida, 9/11, Mohammed Atta etc. to US citizens.
    - nannal 10y ago
      So triggering^2

yoz-y 10y ago

From the wikipedia article I gather that the only Giffen goods that were actually shown to exist are the Veblen goods and thus disqualify as Giffen goods. It seems to me that Giffen goods are a theoretical thing that has never been actually shown in real world (as the article states, all of the proposed examples were discarded). The case of website cost going down and demand going up seems pretty standard.

lmm 10y ago
How are you distinguishing between Giffen and Veblen goods? If you define Veblen in such a way that all Giffen goods are Veblen and then say that disqualifies them then of course you'll find there are no Giffen goods.
- yoz-y 10y ago
  According to the article: > To be a true Giffen good, the good's price must be the only thing that changes to produce a change in quantity demanded. A Giffen good should not be confused with products bought as status symbols or for conspicuous consumption (Veblen goods) Veblen goods = Goods for which demand rises with price because they are status symbols Giffen = Goods for which demand rises with price - Veblen Goods However there are no examples there that hold, to me this signifies that the only goods for which the law of demand does not apply are status symbols.
  - JangoSteve 10y ago
    Isn't a Giffen good then just something where one infers quality from price? I've seen that happen many times with my own eyes, so hard to believe they've never been identified. It's possible to price something so cheap, people assume there's a catch.
    - chimeracoder 10y ago
      > Isn't a Giffen good then just something where one infers quality from price? No, it's an inferior good (in the economic sense) in which the (negative) income effect of a price increase outweighs the success substitution effect. What you are describing is a good that has a positive elasticity of demand with respect to income (or, technically, two different goods, because the higher price represents a different good altogether - one with a higher status symbol).