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Those sweet economists. (I’ve got my MSc in Economics ;) First off: Giffen and Veblen goods? Second off: while I’m all for the theoretical models and would even

by wjnc 4y ago

Those sweet economists. (I’ve got my MSc in Economics ;) First off: Giffen and Veblen goods? Second off: while I’m all for the theoretical models and would even defend that institutional evolution would lead to markets representing theoretical IO markets … a local horse butcher in a Dutch town is not a profit maximizing entity. He’s got sticky and human relations on his supply side, sticky and human relations on his demand side and a finite time horizon in which the butcher takes pride in the job and firm. Ever hear seniors complain about prices rising in small stores? Store owners take that into account. Marginal local stores bordering on bankruptcy tell you that. He picks prices because all things considering that price makes sense to him.

nanis 4y ago
> Those sweet economists. (I’ve got my MSc in Economics ;) > Giffen and Veblen goods? Let me know when you find one. Grazing grounds for the perpetually counter-example starved. > I’m all for the theoretical models Nothing theoretical about what I said: Simple logic. Your claim is that Dutch butchers would prefer to leave free money on the table?
- wjnc 4y ago
  Yes, I believe that every (small) shop or store leaves money on the table all the time. The best I can give you is somewhat optimizing some of the time with long perturbations. A function of social relationships on all sides, Excel [1], one-shot pricing, bounded rationality and myopia, endowment effects etc. If you look at the economic performance of firms within sectors you’ll see massive diversity in value added. That’s pretty much proof that business leave money on the table. Other example is the way inflation winds it’s way through pricing. It’s rocky and uneven. Anyone whose ever seen a business in operation will agree it’s satisficing not optimizing. [1] Excel explains why large companies retain lots of efficiencies. Nature of the firm debate points to all kinds of relative efficiencies, which I happily applaud.

by wjnc 4y ago

nanis 4y ago

> Those sweet economists. (I’ve got my MSc in Economics ;) > Giffen and Veblen goods? Let me know when you find one. Grazing grounds for the perpetually counter-example starved. > I’m all for the theoretical models Nothing theoretical about what I said: Simple logic. Your claim is that Dutch butchers would prefer to leave free money on the table?

wjnc 4y ago
Yes, I believe that every (small) shop or store leaves money on the table all the time. The best I can give you is somewhat optimizing some of the time with long perturbations. A function of social relationships on all sides, Excel [1], one-shot pricing, bounded rationality and myopia, endowment effects etc. If you look at the economic performance of firms within sectors you’ll see massive diversity in value added. That’s pretty much proof that business leave money on the table. Other example is the way inflation winds it’s way through pricing. It’s rocky and uneven. Anyone whose ever seen a business in operation will agree it’s satisficing not optimizing. [1] Excel explains why large companies retain lots of efficiencies. Nature of the firm debate points to all kinds of relative efficiencies, which I happily applaud.