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Comment author: Jiro 30 June 2016 09:07:30PM *  1 point [-]

I think the cup holders in cars argument was refuted by this comment to your original post: http://lesswrong.com/lw/h2a/the_cupholder_paradox/8nre

And more generally and perhaps more importantly, this one: http://lesswrong.com/lw/h2a/the_cupholder_paradox/8nsg

Comment author: PhilGoetz 01 August 2016 07:37:24PM *  0 points [-]

I already responded to both those comments, so you already know I don't think those comments are any refutation at all.

Cup-holders are not a complex engineering problem (as the first comment said), and the preferences of the European and Asian markets are irrelevant for cars that are, please recall, built specifically to be sold in the United States. Nobody sells identical cars in Europe and in the United States. They often don't even sell the same models in the US.

The response (of the second comment) boils down to "you are silly if you think you know enough to criticize the work of people who make cup-holders for a living". If you accept that as a valid response, that could be used to shut down all critical activity. It's the same as responding to #BlackLives Matter by saying "You can't criticize the police for shooting people unless you're a policeman."

Comment author: Jiro 30 June 2016 09:20:38PM *  2 points [-]

"Market failure" in this case means competition has not driven the price down to a socially-optimal level.

If I check out your own source by going to that link, Amazon provides a link to Medique 10133 Alcalak Sugar Free Tablets, 100-Pack, for $10.23. Furthermore, this seller easily found with Google has the same"$30 bottle" available for $4.29.

Comment author: PhilGoetz 01 August 2016 07:29:57PM 0 points [-]

I didn't see that. If you check your source by reading the reviews on the page you linked to, you'll see that Medique 10133 Alcalak Sugar Free Tablets are not, in fact, sugar-free. The label on them says "May contain sucrose."

Comment author: PhilGoetz 01 August 2016 07:15:57PM *  2 points [-]

From the International Craniofacial Institute's web page on cleft palate.

What they say:

Statistics reassure us that having a child with a cleft does not mean you’ll have other children with the same condition. In fact, your chances only increase by 2 to 5 percent compared to couples with no cleft-affected children.

What they mean:

The chances that your next child will have cleft palate increases from 0.15% to about 4%. Your odds ratio multiplier is 25.

Irrationality Quotes August 2016

5 PhilGoetz 01 August 2016 07:12PM

Rationality quotes are self-explanatory.  Irrationality quotes often need some context and explication, so they would break the flow in Rationality Quotes.

Comment author: Lumifer 30 June 2016 02:39:18PM *  6 points [-]

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.

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.

The market failure is that competition has not driven the cost down close to the cost of production.

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.

Comment author: PhilGoetz 25 July 2016 12:54:08AM 0 points [-]

That doesn't look like a viable hypothesis because if it were true, such people would not be VCs at all.

That statement makes no sense and has no support. What, you're imagining that I said that VCs think all profitable things are already being done? That is not what I said. What I said, which is true, is that VCs don't jump into established markets that already have huge dominant players.

In real life the markets drive the price down to the cost of production only occasionally.

"Close to", not "to". The difference is enormous--it's the difference between free market theory and Marxism.

The theory of the free market is that markets do so; failure to do so is called a failure of the market. It is a theoretical term, so saying "theories are secondary" is nonsense.

Restated:

In real life the markets drive the price down close to the cost of production only occasionally.

Citation needed.

Comment author: Jiro 01 July 2016 07:14:55PM 0 points [-]

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.

Comment author: PhilGoetz 25 July 2016 12:49:04AM 0 points [-]

Where?

Comment author: Lumifer 30 June 2016 04:14:16AM 1 point [-]

So, Thinx did a kickstarter and has now sold hundreds of thousands of thousands of absorbent underwear for about $30 each.

I fail to see how this is a market failure. At most this was a bad bet by VCs.

No profit to be had?

Maybe. Without knowing the details it's hard to tell. And again, at most this was a bad decision by Tums. The market is selling the sugar-free Tums at the appropriate price, is it not?

Comment author: PhilGoetz 30 June 2016 05:55:08AM *  -1 points [-]

I fail to see how this is a market failure. At most this was a bad bet by VCs.

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.

Maybe. Without knowing the details it's hard to tell. And again, at most this was a bad decision by Tums. The market is selling the sugar-free Tums at the appropriate price, is it not?

$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.

Comment author: James_Miller 30 June 2016 02:02:18AM 4 points [-]

Kickstarter is part of the market so, from what you have described, Thinx is a market success story.

Comment author: PhilGoetz 30 June 2016 05:51:35AM 0 points [-]

My point is that the existing companies failed to provide a product that consumers wanted, and VCs relied on the "fact" that the market is efficient to "prove" that Thinx could not succeed, since it did not bring anything to the table that the big companies couldn't have done themselves..

Comment author: jimrandomh 30 June 2016 01:01:32AM 4 points [-]

Diabetics can't have the tablets with sugar

This is false.

Comment author: PhilGoetz 30 June 2016 05:50:09AM 4 points [-]

Many diabetics think they can't. I've found their comments on the internet.

Comment author: Lumifer 18 June 2016 03:48:16AM 1 point [-]

I would argue all those values are irrational.

Please do.

The expression "irrational values" sounds like a category mistake to me.

Comment author: PhilGoetz 30 June 2016 12:23:26AM *  0 points [-]

What you're really doing by saying "My utility function might value my self-perception as a person who votes for X" is phrasing virtue ethics as utilitarianism. That's a move which confuses rather than clarifies. If you value your self-perception as a person who votes for X, you aren't a consequentialist; you believe in virtue ethics.

Can you say it? Yes; you can in theory be a virtue utilitarian. But no real-life virtue ethicists are utilitarians. Hence, confusion.

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