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Thats not really accurate. The rest of the curriculum is about how that is still correct but how people attempt to gain market power so they can stop others und

Thats not really accurate. The rest of the curriculum is about how that is still correct but how people attempt to gain market power so they can stop others undercutting them, bringing market back to efficiency.

kristopolous 4y ago
There's this strange thing that is done. We have economics departments and business schools and they aren't the same thing. Mainstream neoclassical economics is mostly preoccupied with what ought to happen in some mathematically defined fantasy world and business school is the study of what actually does happen. In fact when you get into post-graduate classical economics, it's mostly just a formal branch of mathematics with models and axioms. It's got nothing to do with how people actually engage in the real world with the distribution of resources. It's based on some mathematically defined homo-economicus and has a bunch of assumptions like infinite knowledge, exclusively rational and always correct based on some utility function calculation, etc... as if every single person, without exception, pours over arbitrarily complex excel spreadsheets covering a wide variety of properties for every single purchase and they all, in unison, arrive at the exact same conclusions and without any more thought immediately respond to the price signal. Oh and they also are acting only in their self-interest without any regard, at all, like some kind of narcissistic psychopath, for anything but themselves. That's why the advanced economics books are just proofs, axioms and math while the business books are things like real world sales numbers. Classical Economic theories predict real world human behavior about as much as an astrology chart. (There's lots of revolutionary work in economics in the past 30 years that present other models but many people outside the discipline haven't gotten the memo yet and think James M Buchanan and other Virginia and Chicago school people from the mid-20th century are all of economics - it isn't and never was) I've given a pretty good multi-year study into both. One of them reflects reality more. Price signal is real, don't ignore it. $100 packs of gum won't sell ... unless they do (https://www.mastika.store/products/mastika-gum-gold https://www.mastika.store/products/mastika-gum-gold) It's part of the "4-6" ps of marketing. (usually price/place/promotion/product - sometimes people and presentation). As you can see in that link, those things are part of it. It's way more complicated than sellers stupidly slashing their profit margins in some purely competitive feeding frenzy for your dollar. That does happen - but usually only in collapsing markets where price, speculation, information, and value are counterintuitively all unknown. Robert Shiller has documented this, how the predictive capacity of neoclassical models reach their highest accuracy during market panics. So there is that
- listenallyall 4y ago
  I think marketing (and branding) is the antithesis of classical economics and the primary reason reality diverges from theory. Marketing is extremely effective (despite everyone saying they are immune) at de-commodifying commodity products and detaching demand from price (or at least minimizing price's importance) Take auto insurance... probably the biggest TV advertiser in the US. Highly regulated product, nothing tangible, it's all the same. But the gecko and Flo and Jake from State Farm are there every commercial break to pound your head in to differentiate their product from alternatives. Doesn't hurt that price discovery is painful in this industry, they know it is unlikely you'll compare more than 2, mayyyyybe 3, companies. Meanwhile there's essentially zero marketing for health insurance in USA, because people have no choices, the employer chooses for you.
  - kristopolous 4y ago
    Marketing is part of the product design. The decisions on what to do and what not to do when coding or designing a feature should be a result of a marketing interrogation because you're building the product to be used in some set of ways by some set of people. Once you stop thinking about what they actually care about, you're drifting away from a successful execution. This is from copy to code. From price to presentation to features and flow. It's not a nice to have or something that's tacked on, it is the soul of the product in the prospects mind - the driving force for the whole effort from the first keystroke to the last signoff from QA, your product lives or dies by your market models and theories and how focused your execution of them were. Doing this right is the difference between Creative Zen, Apple iPod and Sandisk Sansa or FirefoxOS, Android and MeeGo. Technical competency is a necessary ingredient but it doesn't get you there alone. If you want to build something that doesn't bomb, you need to study marketing, significantly and heavily.
    - RugnirViking 4y ago
      while that may be, i'm not sure how it relates to what the previous commenter was saying.
krsrhe 4y ago
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kristopolous 4y ago

There's this strange thing that is done. We have economics departments and business schools and they aren't the same thing. Mainstream neoclassical economics is mostly preoccupied with what ought to happen in some mathematically defined fantasy world and business school is the study of what actually does happen. In fact when you get into post-graduate classical economics, it's mostly just a formal branch of mathematics with models and axioms. It's got nothing to do with how people actually engage in the real world with the distribution of resources. It's based on some mathematically defined homo-economicus and has a bunch of assumptions like infinite knowledge, exclusively rational and always correct based on some utility function calculation, etc... as if every single person, without exception, pours over arbitrarily complex excel spreadsheets covering a wide variety of properties for every single purchase and they all, in unison, arrive at the exact same conclusions and without any more thought immediately respond to the price signal. Oh and they also are acting only in their self-interest without any regard, at all, like some kind of narcissistic psychopath, for anything but themselves. That's why the advanced economics books are just proofs, axioms and math while the business books are things like real world sales numbers. Classical Economic theories predict real world human behavior about as much as an astrology chart. (There's lots of revolutionary work in economics in the past 30 years that present other models but many people outside the discipline haven't gotten the memo yet and think James M Buchanan and other Virginia and Chicago school people from the mid-20th century are all of economics - it isn't and never was) I've given a pretty good multi-year study into both. One of them reflects reality more. Price signal is real, don't ignore it. $100 packs of gum won't sell ... unless they do (https://www.mastika.store/products/mastika-gum-gold https://www.mastika.store/products/mastika-gum-gold) It's part of the "4-6" ps of marketing. (usually price/place/promotion/product - sometimes people and presentation). As you can see in that link, those things are part of it. It's way more complicated than sellers stupidly slashing their profit margins in some purely competitive feeding frenzy for your dollar. That does happen - but usually only in collapsing markets where price, speculation, information, and value are counterintuitively all unknown. Robert Shiller has documented this, how the predictive capacity of neoclassical models reach their highest accuracy during market panics. So there is that

listenallyall 4y ago
I think marketing (and branding) is the antithesis of classical economics and the primary reason reality diverges from theory. Marketing is extremely effective (despite everyone saying they are immune) at de-commodifying commodity products and detaching demand from price (or at least minimizing price's importance) Take auto insurance... probably the biggest TV advertiser in the US. Highly regulated product, nothing tangible, it's all the same. But the gecko and Flo and Jake from State Farm are there every commercial break to pound your head in to differentiate their product from alternatives. Doesn't hurt that price discovery is painful in this industry, they know it is unlikely you'll compare more than 2, mayyyyybe 3, companies. Meanwhile there's essentially zero marketing for health insurance in USA, because people have no choices, the employer chooses for you.
- kristopolous 4y ago
  Marketing is part of the product design. The decisions on what to do and what not to do when coding or designing a feature should be a result of a marketing interrogation because you're building the product to be used in some set of ways by some set of people. Once you stop thinking about what they actually care about, you're drifting away from a successful execution. This is from copy to code. From price to presentation to features and flow. It's not a nice to have or something that's tacked on, it is the soul of the product in the prospects mind - the driving force for the whole effort from the first keystroke to the last signoff from QA, your product lives or dies by your market models and theories and how focused your execution of them were. Doing this right is the difference between Creative Zen, Apple iPod and Sandisk Sansa or FirefoxOS, Android and MeeGo. Technical competency is a necessary ingredient but it doesn't get you there alone. If you want to build something that doesn't bomb, you need to study marketing, significantly and heavily.
  - RugnirViking 4y ago
    while that may be, i'm not sure how it relates to what the previous commenter was saying.

krsrhe 4y ago

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