3 ms·

Some aspects of the conjecture make sense and are observable: Consider e.g. Steam (digital video games): Prices are discounted over time because of "greed" (=>

Some aspects of the conjecture make sense and are observable: Consider e.g. Steam (digital video games): Prices are discounted over time because of "greed" (=> desire to sell the same product to customers that value it less than the first wave). Customers do adapt to this, and expect future discounts (sales) at release date already, and defer their purchase accordingly (despite valueing it higher!). But in reality, customers are not 100% rational, don't have perfect information (on seller strategy), and the product value (to buyers) changes over time too (typically mostly downward), so the base assumptions are difficult to find in reality.

tskj 3mo ago
But this conjecture predicts that Steam prices will drop immediately to their final low price. So Steam is actually also a counterexample.
- 0zer0 3mo ago
  I disagree. Imho, the problem of this simple model is to find a situation in reality which is close enough to fulfill the constraints. E.g., it is implied that consumers can postpone their purchase longer than the monopolist is willing to realize the profit. Is it the case here? Or is there actually a game so durable that is not losing its appeal over time? And is there a game which can be considered a monopoly (as an activity for spending free time)? All of these points have to be fulfilled, none of them is, i.e., the conjecture simply doesn't apply.
  - tskj 3mo ago
    Yeah I guess it's fine to demand the situation actually conform to the assumptions of the theory, but these assumptions are so extreme they have literally never held for any situation, and they never will.
PunchyHamster 3mo ago
> Consider e.g. Steam (digital video games): Prices are discounted over time because of "greed" (=> desire to sell the same product to customers that value it less than the first wave). Steam doesn't have actual monopoly. Their position is caused wholly by competition consistently shooting themselves in the foot by either offering inferior product or just annoy the customers For example let's take EGS: "We will take lower cut, buy from us!" "Ok, so that means game will be cheaper right ?" "Of course not! Just devs get that. Also we lied in marketing and compared our pre-transaction-fees cut to Steam's post transaction fees cut. Also we didn't mention Steam lowers their cut when games sell well, so the difference is far smaller in reality" "Sigh, I guess I might try it for that reason, how does your service looks like" "Well it has 1% of the features Steam has and about 20% of the features you actually use in Steam are here" "...why the hell I'd buy at you?" "Coz we paid devs of games you like to release exclusively at our platform?" "How about fuck you I'd just get it on Steam". About only competitor that tried was GOG but their "no DRMed games at all" motto meant that they just don't have games people wanted. So, Steam enforces DRM while GOG doesn't? That's an improvement! Actually no, Steam DRM is entirely opt in and devs don't need to use it at all.
- ahartmetz 3mo ago
  Well yeah. Challengers of a (quasi-) monopoly need to be better, but they behave like they are the monopoly who can piss on its users and Steam doesn't. The situation is completely ridiculous.
- akk0 3mo ago
  Confused readers may note that EGS refers, I think, to the Epic Games Store, and not to EroGameScape (which does not run a marketplace)
jdhwosnhw 3mo ago
I think the biggest (and, in my opinion, obvious) problem with this argument is that it relies on time having no value in the eyes of the consumer (or, equivalently, that the seller believes this to be the case). A consumer 5 years after a game's release may only purchase said game at marginal cost, but the consumer 1 day after release is willing to pay a premium to receive the product. There really doesn't seem to be any logical support for the component of the conjecture that says "because the price may eventually settle to the marginal cost, it must immediately settle to the marginal cost". There is obviously a time-constant present
- mitthrowaway2 3mo ago
  Yes, especially for a durable good like a video game, having it now means having it now AND also having it later. It strictly dominates having it later, so I would be willing to pay more. Plus, there's utility in synchronizing with my friend group so we can play through together at the same time, discuss it without spoilers, play multiplayer while our skill levels are similar, etc. And that purchase timing will typically be set by the eagerest friend, rather than the stingiest. So yeah. I do wait for deals sometimes but it would be silly to say that these two things have the same value in the eye of the consumer.
  - _alternator_ 3mo ago
    An example that came up in the article is medicine (or more precisely a medical patent), which also clearly has an extremely strong time value, particularly for lifesaving medicine.
  - Ferret7446 3mo ago
    This still applies to "non durable" goods. Food is worth more today than it is next year, not least of which because if you starve, you won't get a chance to eat it next year. All goods are worth more sooner than later (relative to when they are needed), which is why people pay a premium for faster delivery.
- xg15 3mo ago
  Maybe that's what "durable" means in economic jargon? A good that does not (or only very slowly) lose value over time? If that what it means, Steam would not apply, because games were by that definition very much not durable.
Someone 3mo ago
> Customers do adapt to this, and expect future discounts (sales) at release date already, and defer their purchase accordingly (despite valueing it higher!). > But in reality, customers are not 100% rational Or they are, and assign higher value to having the product now, rather than in the future. I can easily see that apply in the case of pharma, where paying $$$ now can be preferable even over getting the product for free a month from now, when you’re dead.
skrebbel 3mo ago
These aren’t monopolists, unless you define the market as “that single game” which frankly is a bit ridiculous.

tskj 3mo ago

But this conjecture predicts that Steam prices will drop immediately to their final low price. So Steam is actually also a counterexample.

0zer0 3mo ago
I disagree. Imho, the problem of this simple model is to find a situation in reality which is close enough to fulfill the constraints. E.g., it is implied that consumers can postpone their purchase longer than the monopolist is willing to realize the profit. Is it the case here? Or is there actually a game so durable that is not losing its appeal over time? And is there a game which can be considered a monopoly (as an activity for spending free time)? All of these points have to be fulfilled, none of them is, i.e., the conjecture simply doesn't apply.
- tskj 3mo ago
  Yeah I guess it's fine to demand the situation actually conform to the assumptions of the theory, but these assumptions are so extreme they have literally never held for any situation, and they never will.

PunchyHamster 3mo ago

> Consider e.g. Steam (digital video games): Prices are discounted over time because of "greed" (=> desire to sell the same product to customers that value it less than the first wave). Steam doesn't have actual monopoly. Their position is caused wholly by competition consistently shooting themselves in the foot by either offering inferior product or just annoy the customers For example let's take EGS: "We will take lower cut, buy from us!" "Ok, so that means game will be cheaper right ?" "Of course not! Just devs get that. Also we lied in marketing and compared our pre-transaction-fees cut to Steam's post transaction fees cut. Also we didn't mention Steam lowers their cut when games sell well, so the difference is far smaller in reality" "Sigh, I guess I might try it for that reason, how does your service looks like" "Well it has 1% of the features Steam has and about 20% of the features you actually use in Steam are here" "...why the hell I'd buy at you?" "Coz we paid devs of games you like to release exclusively at our platform?" "How about fuck you I'd just get it on Steam". About only competitor that tried was GOG but their "no DRMed games at all" motto meant that they just don't have games people wanted. So, Steam enforces DRM while GOG doesn't? That's an improvement! Actually no, Steam DRM is entirely opt in and devs don't need to use it at all.

ahartmetz 3mo ago
Well yeah. Challengers of a (quasi-) monopoly need to be better, but they behave like they are the monopoly who can piss on its users and Steam doesn't. The situation is completely ridiculous.
akk0 3mo ago
Confused readers may note that EGS refers, I think, to the Epic Games Store, and not to EroGameScape (which does not run a marketplace)

jdhwosnhw 3mo ago

I think the biggest (and, in my opinion, obvious) problem with this argument is that it relies on time having no value in the eyes of the consumer (or, equivalently, that the seller believes this to be the case). A consumer 5 years after a game's release may only purchase said game at marginal cost, but the consumer 1 day after release is willing to pay a premium to receive the product. There really doesn't seem to be any logical support for the component of the conjecture that says "because the price may eventually settle to the marginal cost, it must immediately settle to the marginal cost". There is obviously a time-constant present

mitthrowaway2 3mo ago
Yes, especially for a durable good like a video game, having it now means having it now AND also having it later. It strictly dominates having it later, so I would be willing to pay more. Plus, there's utility in synchronizing with my friend group so we can play through together at the same time, discuss it without spoilers, play multiplayer while our skill levels are similar, etc. And that purchase timing will typically be set by the eagerest friend, rather than the stingiest. So yeah. I do wait for deals sometimes but it would be silly to say that these two things have the same value in the eye of the consumer.
- _alternator_ 3mo ago
  An example that came up in the article is medicine (or more precisely a medical patent), which also clearly has an extremely strong time value, particularly for lifesaving medicine.
- Ferret7446 3mo ago
  This still applies to "non durable" goods. Food is worth more today than it is next year, not least of which because if you starve, you won't get a chance to eat it next year. All goods are worth more sooner than later (relative to when they are needed), which is why people pay a premium for faster delivery.
xg15 3mo ago
Maybe that's what "durable" means in economic jargon? A good that does not (or only very slowly) lose value over time? If that what it means, Steam would not apply, because games were by that definition very much not durable.

Someone 3mo ago

> Customers do adapt to this, and expect future discounts (sales) at release date already, and defer their purchase accordingly (despite valueing it higher!). > But in reality, customers are not 100% rational Or they are, and assign higher value to having the product now, rather than in the future. I can easily see that apply in the case of pharma, where paying $$$ now can be preferable even over getting the product for free a month from now, when you’re dead.

skrebbel 3mo ago

These aren’t monopolists, unless you define the market as “that single game” which frankly is a bit ridiculous.