Dynamic versus static competition
Ever since David Teece and coauthors began writing about antitrust and innovation in high-tech industries in the 1980s, we’ve understood that traditional, price-based antitrust analysis is not intrinsically well-suited for assessing merger policy in these markets.
For high-tech industries, performance, not price, is paramount — which means that innovation is key:
Competition in some markets may take the form of Schumpeterian rivalry in which a succession of temporary monopolists displace one another through innovation. At any one time, there is little or no head-to-head price competition but there is significant ongoing innovation competition.
Innovative industries are often marked by frequent disruptions or “paradigm shifts” rather than horizontal market share contests, and investment in innovation is an important signal of competition. And competition comes from the continual threat of new entry down…
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Over at Alternet, Robert Reich attempts to make the case for a redistributive tax based upon technology. There are a number of flaws within this text, but the biggest is he accidently undoes his case.
Mr. Reich states:
Imagine a small box – let’s call it an “iEverything” – capable of producing everything you could possibly desire, a modern day Aladdin’s lamp.
You simply tell it what you want, and – presto – the object of your desire arrives at your feet.
The iEverything also does whatever you want. It gives you a massage, fetches you your slippers, does your laundry and folds and irons it.
The iEverything will be the best machine ever invented.
The only problem is no one will be able to buy it. That’s because no one will have any means of earning money, since the iEverything will do it all.
If, indeed, a machine (or machines)…
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On his Facebook, Sen. Bernie Sanders uploaded the following graphic*:
The Senator is trying to spin this as an argument for renewable energy, but in doing so he confuses costs and benefits. Ironically, he makes an extremely strong case against renewables:
Looking at this chart, we see approximately the same number of jobs in coal and nuclear. Renewables have a considerably higher number of jobs. But their output are quite different. According to the EIA, coal produces approximately 16% of our energy consumption (or about 15.6 quadrillion BTU). Nuclear power is ~9% (or ~8.8 quadrillion BTU). Renewables are ~10% (or 9.8 quadrillion BTU).
What does this mean for resource efficiency? Quite a lot. The average worker in coal produces 2.1e^11 BTU. The average nuclear worker produces 1.1e^11 BTU. The average renewable worker produces 1.8e^10 BTU. That means the average coal worker is 1033.92% more efficient than the average renewable worker!…
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Every day that passes seems to suggest that the Dunning-Kruger Effect is at work on an industrial scale, in both the US, with the Trump Presidency, and the UK over Brexit. But then I may be biased. I thought it worth including the useful Wikipedia summary of the underlying research that is perhaps best captured by Shakespeare’s more balanced : “The fool doth think he is wise, but the wise man knows himself to be a fool” (As You Like It Act V.i)
The Dunning–Kruger effect is a cognitive bias in which low-ability individuals suffer from illusory superiority, mistakenly assessing their ability as much higher than it really is. Psychologists David Dunning and Justin Kruger attributed this bias to a metacognitive incapacity, on the part of those with low ability, to recognize their ineptitude and evaluate their competence accurately. Their research also suggests corollaries: high-ability individuals…
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