Market Failure on Graeme's

Tablets: anti-consumer and anti-innovation

Fri, 06 Sep 2013 06:52:41 +0000

Tablet computers (and smart phones) are bad. They are bad for consumers and kill innovation. They move power from the owner of the device to its manufacturer, and denying the use of a cheap base for research and development, the very base that made the tablets possible in the first place, and, if PCs follow suit, innovation will become much harder. They deny consumers choice, are sometimes impossible to update (a security nightmare) and are inflexible.

How big business undermines the free market.

Wed, 11 Nov 2009 09:19:55 +0000

The FT has the best mainstream media take I have seen on something I have been saying for a long time.

Efficient markets, bamboozled journalists and stupid regulators

Mon, 09 Nov 2009 08:03:38 +0000

The media seems to have reached a consensus that the efficient markets hypothesis (EMH) has been discredited by the financial crises. I have been somewhat bemused by this, as I could not see the connection.

Linux is fruit juice, Windows is cola

Tue, 18 Nov 2008 21:37:05 +0000

A discussion about why Linux has been so slow to take off made be realise that, essentially, Windows is like cola, Linux is like fruit juice. Its marketing that matters.

Product specifications and consumer stupidity

Fri, 14 Nov 2008 07:28:36 +0000

New research provides more evidence that people simply are not rational in choosing what they buy, a fundamental assumption of economics. I have previously discussed problems including consumers inability to understand many products.

If this is the market working, what is failure?

Mon, 31 Mar 2008 07:54:21 +0000

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.

Good Regulation, bad regulation

Thu, 21 Jun 2007 08:23:52 +0000

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.

Technology confuses everyone

Mon, 23 Apr 2007 07:50:11 +0000

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.

How to exploit monopolies and distort markets

Thu, 19 Apr 2007 08:57:46 +0000

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.

Private monopoly vs public monopoly

Thu, 12 Apr 2007 09:53:58 +0000

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?

Technology subverts more markets

Sat, 07 Apr 2007 08:06:03 +0000

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

Thu, 15 Feb 2007 10:36:06 +0000

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?

Drug patents: inefficient R & D funding

Sun, 04 Feb 2007 11:39:02 +0000

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.

Bad incentives in drug development

Wed, 31 Jan 2007 12:40:02 +0000

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: