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Turns out that $ profit is one of the least gameable metrics. Not completely ungameable, but for a consumer product manufacturer in a free market it's the leas
by tlb 2y ago
Turns out that $ profit is one of the least gameable metrics.
Not completely ungameable, but for a consumer product manufacturer in a free market it's the least gameable metric invented so far.
- einpoklum 2y ago1. Oh, you'd be surprised. 2. "Free" and "market" are fundamentally contradictory terms. But that point is irrespective of the difficulty of quantifying complexity/heft of tasks and goals.
- Scene_Cast2 2y agoI've seen companies actively, knowingly, and purposely trade future growth, user experience, and user retention for immediate profits.
- GJim 2y agoI've seen governments do the same. Many times.
- mempko 2y agoExplain Amazon then, a company notorious for being unprofitable yet producing a great experience. Markets are kind of a dumb thing if you think about it. You take all the qualities of an item and project them into a single scalar we call 'price'. Then use that scalar as a form of comparison. It's comical when you think about it. Seems we need a better technology now that we have computers.
- sien 2y agoAmazon invested profits. For many years ago they could turn a switch and become profitable. The share price kept rising while they were investing profits in expanding. It's far from a fool proof way of doing things, many companies that prioritise growth over profitability wind up with neither, but Amazon managed it. As for prices, no computer can work out my preference or not for a Mac over a PC, or a iPhone over an Android, or how much quality I will pay for in a bike. Prices reveal this. Ludwig von Mises said this was why Communism wouldn't work in 1920. He was right. https://en.wikipedia.org/wiki/Economic_calculation_problem https://en.wikipedia.org/wiki/Economic_calculation_problem
- mempko 2y agoYou misunderstood what I meant about prices. My point is prices compress everyone's preferences and ability to pay into a single scalar. It seems we can do better no?
- etblg 2y agoTheir net income for the previous quarter results was $15.3 billion, in what way are they known for being unprofitable?
- amai 2y agoShort term profits are easily gameable. And before the long-term issues hit you you can simply leave the company or find someone to buy it ( and you will, because of the "high" profits). That is how modern economics actually works.