3 ms·

Bad take. If the market "functions" according to your definition, then what is the incentive to innovate? (besides shits and giggles, which is not sustainable)

Bad take. If the market "functions" according to your definition, then what is the incentive to innovate? (besides shits and giggles, which is not sustainable). No markets are efficient. While it's probably a bad idea to worship at the altar of profit: A profit of zero for most productive pursuits is not ideal.

yoyohello13 3y ago
Innovation create a temporary inefficiency that the innovator can take advantage of. Once the market stabilizes there are no more profits to be had. So this theoretically would always drive innovation.
rthrfrd 3y ago
Innovation gives you a valuable competitive advantage - that doesn’t mean it lasts forever - that’s why companies have to constantly develop to stay competitive. Or, they gain enough power to create a failed market, in which it is practically impossible for new entrants to compete and eliminate the incumbent’s rent-seeking. This is what we so often see now, particular in markets with strong economies of scale. An “efficient market” does not mean it is at its optimal efficiency all the time, but that there is an efficient equilibrium it is capable of tending towards.
- throwawaymaths 3y ago
  > An “efficient market” does not mean it is at its optimal efficiency all the time, but that there is an efficient equilibrium it is capable of tending towards This is a word salad of nonsense. Please familiarize yourself with the definitions of market efficiency and market equilibrium. Its premise may even be flawed: I also recommend looking up resources which show evidence that concept of market equilibria is itself nonsensical.
  - rthrfrd 3y ago
    > Please familiarize yourself with the definitions of market efficiency and market equilibrium. Yes I did that once during my economics degree. It’s a bastard science and can be debated no end, but those debates are a lot more valuable when the participants actually explain any of their conjectures. But I sense you are more in it for the argument than to help either of us learn.
    - throwawaymaths 3y ago
      I guess you've forgotten then. I'm not here to help you learn, I'm here to help other readers of these threads avoid trying to parse that word salad sophistry
      - deleted 3y ago
        [deleted]
spencerchubb 3y ago
Nobody has ever claimed that markets are efficient, so that's a strawman. The supply and demand model states that markets tend toward efficiency. When there is inefficiency, then someone can exploit it for their benefit while bringing the market closer to efficiency.
- throwawaymaths 3y ago
  > strawman Did we read the same gp which claims that market efficiency is an ideal to be had?
thescriptkiddie 3y ago
There never was an incentive to innovate, unless by "innovate" you mean drive the cost of production down below that of your competitors.

yoyohello13 3y ago

Innovation create a temporary inefficiency that the innovator can take advantage of. Once the market stabilizes there are no more profits to be had. So this theoretically would always drive innovation.

rthrfrd 3y ago

Innovation gives you a valuable competitive advantage - that doesn’t mean it lasts forever - that’s why companies have to constantly develop to stay competitive. Or, they gain enough power to create a failed market, in which it is practically impossible for new entrants to compete and eliminate the incumbent’s rent-seeking. This is what we so often see now, particular in markets with strong economies of scale. An “efficient market” does not mean it is at its optimal efficiency all the time, but that there is an efficient equilibrium it is capable of tending towards.

throwawaymaths 3y ago
> An “efficient market” does not mean it is at its optimal efficiency all the time, but that there is an efficient equilibrium it is capable of tending towards This is a word salad of nonsense. Please familiarize yourself with the definitions of market efficiency and market equilibrium. Its premise may even be flawed: I also recommend looking up resources which show evidence that concept of market equilibria is itself nonsensical.
- rthrfrd 3y ago
  > Please familiarize yourself with the definitions of market efficiency and market equilibrium. Yes I did that once during my economics degree. It’s a bastard science and can be debated no end, but those debates are a lot more valuable when the participants actually explain any of their conjectures. But I sense you are more in it for the argument than to help either of us learn.
  - throwawaymaths 3y ago
    I guess you've forgotten then. I'm not here to help you learn, I'm here to help other readers of these threads avoid trying to parse that word salad sophistry
    - deleted 3y ago
      [deleted]

spencerchubb 3y ago

Nobody has ever claimed that markets are efficient, so that's a strawman. The supply and demand model states that markets tend toward efficiency. When there is inefficiency, then someone can exploit it for their benefit while bringing the market closer to efficiency.

throwawaymaths 3y ago
> strawman Did we read the same gp which claims that market efficiency is an ideal to be had?

thescriptkiddie 3y ago

There never was an incentive to innovate, unless by "innovate" you mean drive the cost of production down below that of your competitors.