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If you can win a lawsuit against a company for a failure it is probably because it wasn't an externality but a contract or warranty agreement they have breached
by unishark 5y ago
If you can win a lawsuit against a company for a failure it is probably because it wasn't an externality but a contract or warranty agreement they have breached. This is present even in niches with minimal regulations.
Data centers offer the highest uptime guarantees at the highest price tiers. People pay more for Toyotas, new or used, because of their reputation. Quality is a product feature. If MBA's want to decide if they can cut corners, there are already upsides and downsides, the calculation is something they need to make.
- jjk166 5y agoYeah, I'm saying add regulations so it is no longer an externality. Quality is a product feature when there is competition, monopolies don't suffer from cutting quality.
- unishark 5y agowhereas I'm saying it's not an externality even in the absence of manipulation by specific regulations, which you apparently agree with given your second sentence. I find that people have a tendency to be overly narrow in considering competition and declaring things monopolies. There are alternative ways to get tasks done that avoid relying on (and paying for) low-quality internet services if companies find it necessary.
- jjk166 5y agoAn externality is a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved. Removing redundancy to increase profit margins affects other parties (ie users) without affecting the cost of the goods or services involved. If and only if the MBA's decision to increase risk to the user is reflected in the costs does it cease to be an externality. And we are specifically talking about an industry over-relying on a single provider of a service. If there were a variety of competing services, the entire point would be moot.