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As the market data shows, most customers value a very low price over anything else. So the market delivers. On the other hand, if the noble ethical goals that

As the market data shows, most customers value a very low price over anything else. So the market delivers. On the other hand, if the noble ethical goals that you list were more important for the customer, he would prefer devices that satisfy these goals (as much as possible) over low prices in his buying decision(s).

xg15 7y ago
How does the market data show that? This is not an A/B test, there is usually not an equivalent alternative to compare against. See e.g. the right-to-repair debate. The function is important enough for farmers to demand regulation and drive the prices of old, non-locked-down tractors through the roof. And yet, it's still more profitable for John Deere to lock down their tractors. When deciding between the packages "modern, feature-rich tractors that are locked down" or "old, reparable but overpriced tractors", the former probably win. That still doesn't imply that farmers "want" locked down tractors or that reparability is of no importance to them. Also yes, we do need ethics in business. Last thing I've read, even some MBAs have heard of that by now.
- wolfgke 7y ago
  > See e.g. the right-to-repair debate. The function is important enough for farmers to demand regulation and drive the prices of old, non-locked-down tractors through the roof. This is in fact a textbook example for how markets work. By the insane prize increase of old, non-locked-down tractors, every sane market participant can see how much more of a prize farmers are willing to pay for non-locked-down tractors. I believe every manufacturer of tractors now does a careful market analysis and is probably (secretly) developing a more open, but expensively prized tractor. My bet: In a few years there will be new tractors on the market that are better repairable, but higher prized - exactly what an economist would predict. It's just that we are currently in a transformation period.
  - pas 7y ago
    Markets can be in pathological states, what people usually call market failures. Basically when the transition cost from one equilibrium to a "better" is too high (barriers to entry, eg due to regulatory capture, not enough capital available, cooperation problems for the many small agents - for example because the powerful agent can punish those who try to organize, what happens when some workers try to unionize), the market stays put. Waste and rents are generated. (The union organizers fired the cost of labor basically freezed.) In case of tractors it's not at all obvious how fast the market will provide the tractors with lower TCO, that farmers wish for.
rixed 7y ago
Have you considered for a moment that the customer knows very little about what she is buying, especially nothing at all about the long term value of the product? When the only thing you know about various alternatives is the price, how are you supposed to choose what's best for you? Information scarcity is a defining feature of modern market, let's not forget that.
- marshray 7y ago
  That's what makes this conversation interesting. People who are in the market for a $20K piece of test equipment are likely to be experts who are well equipped to evaluate the product's specifications.
  - pas 7y ago
    Probably they are just as susceptible to hyperbolic discounting as others. So they undervalue the problem of maintenance in the future compared to saving some money now, even if they are thinking about it.
wpietri 7y ago
The notion that the market is always optimal is one of the central articles of faith in free-market fundamentalism. It's essentially tautological, a commerce-filtered spin on the just world fallacy. What you ignore is that there are a bunch of information and experience asymmetries here, some of them intentionally created by vendors. There are also big problems with short-term biases and principal-agent problems. These lead to demonstrably sub-optimal global outcomes. As an example, look at the recent wave of Softbank-funded idiocy. There's no way WeWork was an optimal deployment of capital. You could have lit $10 billion on fire and done better. But it worked out very well for Adam Neumann, who not only got lots of short-term adulation and wealth, but somehow ended up becoming a billionaire because they paid him to go away. And this is from the supposedly hyper-rational experts in the world of finance. If they can't get it right, there's little reason to think that random purchasers and Tektronic's middle managers will.
JohnFen 7y ago
> As the market data shows, most customers value a very low price over anything else. So the market delivers. Right, and it delivers that by pushing costs onto the greater proportion of people who are not involved. That is neither ethical nor sustainable -- it's more like a kind of theft. What you are citing is a clear example of how the "free market" can fail to operate in the best interests of society.

xg15 7y ago

How does the market data show that? This is not an A/B test, there is usually not an equivalent alternative to compare against. See e.g. the right-to-repair debate. The function is important enough for farmers to demand regulation and drive the prices of old, non-locked-down tractors through the roof. And yet, it's still more profitable for John Deere to lock down their tractors. When deciding between the packages "modern, feature-rich tractors that are locked down" or "old, reparable but overpriced tractors", the former probably win. That still doesn't imply that farmers "want" locked down tractors or that reparability is of no importance to them. Also yes, we do need ethics in business. Last thing I've read, even some MBAs have heard of that by now.

wolfgke 7y ago
> See e.g. the right-to-repair debate. The function is important enough for farmers to demand regulation and drive the prices of old, non-locked-down tractors through the roof. This is in fact a textbook example for how markets work. By the insane prize increase of old, non-locked-down tractors, every sane market participant can see how much more of a prize farmers are willing to pay for non-locked-down tractors. I believe every manufacturer of tractors now does a careful market analysis and is probably (secretly) developing a more open, but expensively prized tractor. My bet: In a few years there will be new tractors on the market that are better repairable, but higher prized - exactly what an economist would predict. It's just that we are currently in a transformation period.
- pas 7y ago
  Markets can be in pathological states, what people usually call market failures. Basically when the transition cost from one equilibrium to a "better" is too high (barriers to entry, eg due to regulatory capture, not enough capital available, cooperation problems for the many small agents - for example because the powerful agent can punish those who try to organize, what happens when some workers try to unionize), the market stays put. Waste and rents are generated. (The union organizers fired the cost of labor basically freezed.) In case of tractors it's not at all obvious how fast the market will provide the tractors with lower TCO, that farmers wish for.

rixed 7y ago

Have you considered for a moment that the customer knows very little about what she is buying, especially nothing at all about the long term value of the product? When the only thing you know about various alternatives is the price, how are you supposed to choose what's best for you? Information scarcity is a defining feature of modern market, let's not forget that.

marshray 7y ago
That's what makes this conversation interesting. People who are in the market for a $20K piece of test equipment are likely to be experts who are well equipped to evaluate the product's specifications.
- pas 7y ago
  Probably they are just as susceptible to hyperbolic discounting as others. So they undervalue the problem of maintenance in the future compared to saving some money now, even if they are thinking about it.

wpietri 7y ago

The notion that the market is always optimal is one of the central articles of faith in free-market fundamentalism. It's essentially tautological, a commerce-filtered spin on the just world fallacy. What you ignore is that there are a bunch of information and experience asymmetries here, some of them intentionally created by vendors. There are also big problems with short-term biases and principal-agent problems. These lead to demonstrably sub-optimal global outcomes. As an example, look at the recent wave of Softbank-funded idiocy. There's no way WeWork was an optimal deployment of capital. You could have lit $10 billion on fire and done better. But it worked out very well for Adam Neumann, who not only got lots of short-term adulation and wealth, but somehow ended up becoming a billionaire because they paid him to go away. And this is from the supposedly hyper-rational experts in the world of finance. If they can't get it right, there's little reason to think that random purchasers and Tektronic's middle managers will.

JohnFen 7y ago

> As the market data shows, most customers value a very low price over anything else. So the market delivers. Right, and it delivers that by pushing costs onto the greater proportion of people who are not involved. That is neither ethical nor sustainable -- it's more like a kind of theft. What you are citing is a clear example of how the "free market" can fail to operate in the best interests of society.