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The problem I have with this is that it presupposes that you can change 1 thing and view the difference. What if the only reason a company is successful is beca

The problem I have with this is that it presupposes that you can change 1 thing and view the difference. What if the only reason a company is successful is because of a unique idea that 3 people came up with together? Are each of them worth 100% of the company- take any of them away and it’d be worth nothing. Any company or endeavour is made up of complex interactions of many different people it’s impossible to differentiate with respect to just one variable.

thaumasiotes 5y ago
> The problem I have with this is that it presupposes that you can change 1 thing and view the difference. You should have other problems with it. Value that would be lost in the absence of a thing is unrelated to the value gained by its presence, because you have more choices than "pay for the thing" or "do without". The theory of value espoused in this post would tell you that you should pay more for the oxygen you consume than you do for your computer. (There is some self-contradiction in the post - it defines counterfactual value thus: > what if pay is determined by asking: “How much would this company be worth without this individual?” But then it provides an example of something very different: > Baseball managers use the Counterfactual Theory of Value all the time, using a statistic called “Wins Above Replacement.” It predicts how many more wins a player gives their team, compared to whoever would replace them.)
- HPsquared 5y ago
  You'd be willing to pay more for the oxygen than the computer (its value is very high) but the price is low (it's free). Usually when you buy something, the value (to you) is greater than the price, which is greater than the cost (to the seller).
  - thaumasiotes 5y ago
    I am no more willing to pay for the oxygen I breathe than you are. It's not just free, it's also worthless. Paying for it would only make sense in a context like scuba diving, where I'd be in an environment in which finding my own oxygen was difficult.
    - HPsquared 5y ago
      The cost is very low (it's everywhere), which drags down the price to zero. People do value oxygen a lot though, it's essential to survival. If someone was to take away all the oxygen,we would see how much people value it: they would go to great lengths to obtain some. This is not usually put to the test, of course. Edit: this question was raised by Adam Smith, known as the diamond-water paradox, or paradox of value: https://en.m.wikipedia.org/wiki/Paradox_of_value https://en.m.wikipedia.org/wiki/Paradox_of_value
dredmorbius 5y ago
Ceteris paribus is actually a central assumption of much economic analysis. The Latin is "all things being equal", and the notion is that a single parameter or input is considered at a time. https://en.wikipedia.org/wiki/Ceteris_paribus https://en.wikipedia.org/wiki/Ceteris_paribus In practice, regression analysis ("econometrics" to economists) and similar analytic methods allow for evaluating multiple factors.

thaumasiotes 5y ago

> The problem I have with this is that it presupposes that you can change 1 thing and view the difference. You should have other problems with it. Value that would be lost in the absence of a thing is unrelated to the value gained by its presence, because you have more choices than "pay for the thing" or "do without". The theory of value espoused in this post would tell you that you should pay more for the oxygen you consume than you do for your computer. (There is some self-contradiction in the post - it defines counterfactual value thus: > what if pay is determined by asking: “How much would this company be worth without this individual?” But then it provides an example of something very different: > Baseball managers use the Counterfactual Theory of Value all the time, using a statistic called “Wins Above Replacement.” It predicts how many more wins a player gives their team, compared to whoever would replace them.)

HPsquared 5y ago
You'd be willing to pay more for the oxygen than the computer (its value is very high) but the price is low (it's free). Usually when you buy something, the value (to you) is greater than the price, which is greater than the cost (to the seller).
- thaumasiotes 5y ago
  I am no more willing to pay for the oxygen I breathe than you are. It's not just free, it's also worthless. Paying for it would only make sense in a context like scuba diving, where I'd be in an environment in which finding my own oxygen was difficult.
  - HPsquared 5y ago
    The cost is very low (it's everywhere), which drags down the price to zero. People do value oxygen a lot though, it's essential to survival. If someone was to take away all the oxygen,we would see how much people value it: they would go to great lengths to obtain some. This is not usually put to the test, of course. Edit: this question was raised by Adam Smith, known as the diamond-water paradox, or paradox of value: https://en.m.wikipedia.org/wiki/Paradox_of_value https://en.m.wikipedia.org/wiki/Paradox_of_value

dredmorbius 5y ago

Ceteris paribus is actually a central assumption of much economic analysis. The Latin is "all things being equal", and the notion is that a single parameter or input is considered at a time. https://en.wikipedia.org/wiki/Ceteris_paribus https://en.wikipedia.org/wiki/Ceteris_paribus In practice, regression analysis ("econometrics" to economists) and similar analytic methods allow for evaluating multiple factors.