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I wonder about this as an efficiency thing. Instead of search, let's use a charity as an example. Why does XYZ charity need a zillion people? Why does it spend
by 6gvONxR4sf7o 7y ago
I wonder about this as an efficiency thing. Instead of search, let's use a charity as an example. Why does XYZ charity need a zillion people? Why does it spend so much on TV ads? The answer tends to be that hiring more people and advertising more brings in more net dollars. You add and add until the marginal cost of another ad/hire/whatever matches the marginal gain. It makes total sense for the charity to do this, but as a potential donor, now less of your dollars go to the thing you care about and more go to admin, advertisers, etc. It's like friction in the system. To compete with you, now other people have to spend on ads, and the whole ecosystem is less efficient.
I think there's an analogy here for for profit companies. Maybe if instead of adding a tiny marginal dollar for BigCo, you could add a big marginal dollar for SmallCo, and society's per capita productivity is lower? I can't pinpoint whether the analogy works for companies, but I suspect it does.