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The question revolves around how do we ensure that companies that optimize to maximize long term customer value do not get undercut and out-competed by companie
by icegreentea2 7y ago
The question revolves around how do we ensure that companies that optimize to maximize long term customer value do not get undercut and out-competed by companies that optimize to maximize short term customer value.
And it's a very challenging thing to do, since most human's natural instincts are to apply hyperbolic discounting models, while companies have to operating on... non-hyperbolic discounting.
- tgsovlerkhgsel 7y agoCreate incentives for (or simply mandate) longer warranty terms. In Germany, anything you buy has a 2-year seller's warranty, plus a presumption that any issues occurring within the first 6 months are a manufacturing defect unless the seller proves otherwise. Turning that into a 5-year warranty on large appliances would be relatively trivial and immediately provide an incentive to make long-lived products.