If this is the market working, what is failure?
at 7:54 am on Monday, 31 March 2008
Brain Caplan thinks markets work fine despite having to wait 19 years to be able to a product with a tiny marginal cost of production: i.e. he spent 19 years waiting on the supplier’s whims just to buy allowed to buy some music. (more…)
Good Regulation, bad regulation
If the continual tightening of regulation in the financial sector good or bad? It depends.
It appears that subjecting Wall Street investment research to legal pressure to be more independent has made things better. The effect has been that sell side analysts are now reasonably willing to make sell recommendations. (more…)
Technology confuses everyone
A blog post by a leading IT security expert explains why the market for security products fails because buyers are unable to evaluate products. This is a more striking example than those I presented earlier because it concerns sophisticated professional buyers like banks and intelligence services. (more…)
How to exploit monopolies and distort markets
Here are a few ways in which a company can exploit a strong market position to extend an existing monopoly, eliminate any remaining competition, and extract the greatest revenues at the lowest cost. (more…)
Private monopoly vs public monopoly
at 9:53 am on Thursday, 12 April 2007
The most sane (albeit not against a very high standard) of a number libertarian (or, at any rate, very pro-market) bloggers in Britain that I read, admits that network effects mean that many markets tend to “collapse” into monopolies. I would add that many more markets tend to become oligopolies or cartels. In the face of this, why does he still believe that leaving everything to the markets is the best way to run an economy? (more…)
Technology subverts more markets
at 8:06 am on Saturday, 7 April 2007
It looks like it is not just consumers who are unable to make informed rational decisions when faced with technology. It appears that Indian cotton farmers have a similar problem when faced with choosing GM seed varieties. In this case as they would clearly wish to choose according to rational criteria, but they cannot.
Technology drives consumers to irrationality
at 10:36 am on Thursday, 15 February 2007
Technology, and the development of technological products, undermine free market mechanisms. One, of many, reasons for this is the problems consumers face in making a choice about purchases. Does this affect the assumption that consumers are able to make informed and rational decisions, which is required by the argument in favour of free markets? (more…)
Drug patents: inefficient R & D funding
Patents allow pharmaceutical companies to sell drugs at several times the price they would be able to get in a competitive market. Only a small proportion of the extra money spent by the public goes into research and development (R & D), despite the latter being the supposed benefit of the higher prices. (more…)
Bad incentives in drug development
at 12:40 pm on Wednesday, 31 January 2007
The pharmaceutical industry would like you to believe that they fund the expensive development of new drugs, they get patents in return, and this provides a nice efficient market driven mechanism for developing new drugs. There are many things wrong with this picture: (more…)
