= 27d567bc2d48d9f40e9ccc20ea370b15)
Jiro comments on Market Failure: Sugar-free Tums - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Powered by Reddit
= f037147d6e6c911a85753b9abdedda8d)
You are viewing a comment permalink. View the original post to see all comments and the full post content.
Comments (30)
You are focusing on the actions of the VCs. That isn't the failure. The failure was by the big players already in the market.
I'm theorizing that the VCs believed that the fact that the big companies did not make any such product proved there was no profitable demand for it, because the market worked. These are not miracle high-tech underwear; they could have been developed years ago. The belief that the market works demands some explanation why they weren't.
$46 a bottle is "the appropriate price"? The phrase is meaningless if it means "whatever price the market is selling it at", so don't use the phrase as if it had a normative aspect. Of course people sell it at some price. The market failure is that competition has not driven the cost down close to the cost of production. "Market failure" doesn't always mean "a failure to sell a product". In this case it means failure of competition to lower costs.
That doesn't look like a viable hypothesis because if it were true, such people would not be VCs at all.
Generally speaking, you seem to expect perfection in business agents. Clearly, this is not so in reality. "The market" is not each individual agent, it is the sum of them all. Moreover, the market works by self-correcting which implies that there are a LOT OF MISTAKES being made all the time. The market is successful because it provides negative feedback to those who make mistakes, so on the average it does what it does quite well, but it would be an error to think that each individual decision is optimal.
Nope. Reality is primary, theories are secondary. In real life the markets drive the price down to the cost of production only occasionally. If your theory says they should, it's the theory that needs to be adjusted.
In real life, you can find the $30 bottle available for $4.29. I don't know if that's exactly the cost of production, but it's low enough that we can stop talking about how this is a market failure because the product can only be sold at high prices.
Where?
I posted the link on this page already. Unless you're trying to insinuate that because the link doesn't work, the product was discontinued.
If so, you should have done a search, which would have found that the product was not discontinued and they just reorganized their site so that URLs now include the directory /products/: http://www.planetrx.com/products/sunmark-sugar-free-extra-strength-calcium-antacid-orange-creme-80-chewable-tablets
They are also available at Wal-Mart for $5.65. Here is a different brand for $3.49, and a different brand, different flavor for $6.40 for 100 tablets.