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They really just have an incentive to make sure that on average you pay more than enough to make them a profit over the expected lifetime of your fridge. They a

They really just have an incentive to make sure that on average you pay more than enough to make them a profit over the expected lifetime of your fridge. They also have an incentive to get you the least expensive fridge with the longest lifetime, regardless of power consumption or any other factors. You already have something very close to this with home warranties and the providers tend to be awful in my experience. The goal is just to extract money from you and keep costs down.

thaumasiotes 8y ago
> They also have an incentive to get you the least expensive fridge with the longest lifetime, regardless of power consumption or any other factors. Sure, as long as you assume higher power consumption doesn't increase the cost of operating the fridge. If you're not willing to assume that, then "regardless of power consumption" doesn't make a lot of sense.
- throwaway8689 8y ago
  If the buyer/owner of the of the fridge is the landlord but the user and power bill payer is the renter then the landlord has little incentive to care about power consumption.
Gustomaximus 8y ago
> The goal is just to extract money from you and keep costs down While this mentality definitely exists, this doesn't account for brand and a wish to protect reputation. Hence why personally I tend to stick with established companies for things like trades as in the absence of a personal relationship, knowing someone has a brand to protect (and history against it) improves my chance of receiving a quality good/service
- smallnamespace 8y ago
  > this doesn't account for brand and a wish to protect reputation While the preservation of a brand might be rational for a corporation as a whole, it might be somewhat easy for executives that are paid quarterly and annual bonuses to temporarily goose profits by sacrificing long term reliability and brand (which only shows up with a long lag time, years down the road), then take their bonuses from investors before going somewhere else. This theory of 'looting' by executives might leave both customers and long-term investors worse off, but is caused by the inability of customers and investors to perfectly incentivize (or monitor) long-term decisionmaking.

thaumasiotes 8y ago

> They also have an incentive to get you the least expensive fridge with the longest lifetime, regardless of power consumption or any other factors. Sure, as long as you assume higher power consumption doesn't increase the cost of operating the fridge. If you're not willing to assume that, then "regardless of power consumption" doesn't make a lot of sense.

throwaway8689 8y ago
If the buyer/owner of the of the fridge is the landlord but the user and power bill payer is the renter then the landlord has little incentive to care about power consumption.

Gustomaximus 8y ago

> The goal is just to extract money from you and keep costs down While this mentality definitely exists, this doesn't account for brand and a wish to protect reputation. Hence why personally I tend to stick with established companies for things like trades as in the absence of a personal relationship, knowing someone has a brand to protect (and history against it) improves my chance of receiving a quality good/service

smallnamespace 8y ago
> this doesn't account for brand and a wish to protect reputation While the preservation of a brand might be rational for a corporation as a whole, it might be somewhat easy for executives that are paid quarterly and annual bonuses to temporarily goose profits by sacrificing long term reliability and brand (which only shows up with a long lag time, years down the road), then take their bonuses from investors before going somewhere else. This theory of 'looting' by executives might leave both customers and long-term investors worse off, but is caused by the inability of customers and investors to perfectly incentivize (or monitor) long-term decisionmaking.