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You talked about market clearing and I'm not sure the concept makes any sense in the absence of a marginal cost of production. Wouldn't wheat be the perfect ex

You talked about market clearing and I'm not sure the concept makes any sense in the absence of a marginal cost of production. Wouldn't wheat be the perfect example of a free market? There might be reasons to dislike the lack of choice of app stores but I think it is completely orthogonal to the oversupply and the pricing issues you talk about. In the UK all sales to consumers are regulated to some extent (trading standards, Unfair Commercial Practices Directive). In terms of something like Which? It takes a lot of time and staff to do well, if you think that you can make a serious go of app reviews on that scale good luck to you but I don't think the market will support it (it may not even support the level of checking that Apple does).

lifeisstillgood 12y ago
> You talked about market clearing and I'm not sure the concept makes any sense in the absence of a marginal cost of production. I would respectfully disagree. Market clearing is I think technically the price for the next unit of production, but even in a world of zero marginal cost (not quite true) then the capital cost still needs to be paid back (laptop, time spent coding flappy up and flappy down). So perhaps the clearing price is the expected number if sales divided by capex? As for setting up which?, no thank you :-) But Apples main justification for App Store is to provide a safe user experience. And I think that has value even if I fail against it. I think I is much more viable to label or test all apps than all websites and people at least pay attention to googles "this web site is not safe" I have sadly kind of forgotten where this thread started as my HN times are about 12 hours apart, and yet I have been surprised that wondering around saying "free market good" has been taken quite badly. I am in favour of regulation btw (far more than I think we are over regulated at least)
- josephlord 12y ago
  >> You talked about market clearing and I'm not sure the concept makes any sense in the absence of a marginal cost of production. > I would respectfully disagree. Market clearing is I think technically the price for the next unit of production, but even in a world of zero marginal cost (not quite true) then the capital cost still needs to be paid back (laptop, time spent coding flappy up and flappy down). So perhaps the clearing price is the expected number if sales divided by capex? This is closer to reality (and further from economic theory but that is a different rant[0]). The trouble is to decide whether to make the investment of that capital cost you need to rely on that other economics assumption: perfect information. The real world doesn't provide perfect information of future customer behaviour so you don't know at the start if you are making Flappy Bird or Floppy Bird. Once you have made it your aim is to maximise your income from it (given the zero marginal cost in the App store). That maximisation needs to occur at a time when the capital cost has already been spent so the capex doesn't actually affect the price you charge. Even if you are making a loss increasing the price doesn't help as less people will buy it (you were already at the profit maximisation point) and if you were making a profit cutting the price reduces the profit. Note that even the information at the time to set the price isn't available so you are guessing again there without the economists perfect information assumption. Free markets are good but especially in the real world they are not always optimal and market failure isn't unusual. I think app review (at least the keeping malware out, not necessarily the Apple payment lock in part) is a public good but one that would be hard to get people to voluntarily pay for separately and some of the benefit is communal (you benefit from me not having a malware infested phone). We might end up in agreement here. Yeah, regulation is a balancing act. [0] http://www.amazon.co.uk/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926/ http://www.amazon.co.uk/Debunking-Economics-Revised-Expanded...

lifeisstillgood 12y ago

> You talked about market clearing and I'm not sure the concept makes any sense in the absence of a marginal cost of production. I would respectfully disagree. Market clearing is I think technically the price for the next unit of production, but even in a world of zero marginal cost (not quite true) then the capital cost still needs to be paid back (laptop, time spent coding flappy up and flappy down). So perhaps the clearing price is the expected number if sales divided by capex? As for setting up which?, no thank you :-) But Apples main justification for App Store is to provide a safe user experience. And I think that has value even if I fail against it. I think I is much more viable to label or test all apps than all websites and people at least pay attention to googles "this web site is not safe" I have sadly kind of forgotten where this thread started as my HN times are about 12 hours apart, and yet I have been surprised that wondering around saying "free market good" has been taken quite badly. I am in favour of regulation btw (far more than I think we are over regulated at least)

josephlord 12y ago
>> You talked about market clearing and I'm not sure the concept makes any sense in the absence of a marginal cost of production. > I would respectfully disagree. Market clearing is I think technically the price for the next unit of production, but even in a world of zero marginal cost (not quite true) then the capital cost still needs to be paid back (laptop, time spent coding flappy up and flappy down). So perhaps the clearing price is the expected number if sales divided by capex? This is closer to reality (and further from economic theory but that is a different rant[0]). The trouble is to decide whether to make the investment of that capital cost you need to rely on that other economics assumption: perfect information. The real world doesn't provide perfect information of future customer behaviour so you don't know at the start if you are making Flappy Bird or Floppy Bird. Once you have made it your aim is to maximise your income from it (given the zero marginal cost in the App store). That maximisation needs to occur at a time when the capital cost has already been spent so the capex doesn't actually affect the price you charge. Even if you are making a loss increasing the price doesn't help as less people will buy it (you were already at the profit maximisation point) and if you were making a profit cutting the price reduces the profit. Note that even the information at the time to set the price isn't available so you are guessing again there without the economists perfect information assumption. Free markets are good but especially in the real world they are not always optimal and market failure isn't unusual. I think app review (at least the keeping malware out, not necessarily the Apple payment lock in part) is a public good but one that would be hard to get people to voluntarily pay for separately and some of the benefit is communal (you benefit from me not having a malware infested phone). We might end up in agreement here. Yeah, regulation is a balancing act. [0] http://www.amazon.co.uk/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926/ http://www.amazon.co.uk/Debunking-Economics-Revised-Expanded...