News for hackers. Stuff that matters.

A comment on The Zero-Sum Bias: When people think that everything is a competition. Parent comment

Re:The Zero-Sum Bias: When people think that everything is a... by nostrademons on Saturday July 06, 2019 @03:18PM (#20371326)
In a way this is a restatement of the efficient-market hypothesis. If the market is efficient, then a product that is inferior in most or all dimensions will be forced out of the market by one that is superior. Therefore, if you believe in efficient markets and observe that both products are still offered for sale, it's a reasonable inference that the superior product must be inferior in some way that you haven't yet observed.

Usually where this heuristic fails is on the margins, when markets are not efficient and you're observing a change in technology or production techniques. In this case, the correct inference isn't that the product is inferior in some way you haven't observed, it's that the superior product will eventually end up winning and taking over the marketplace.

[ Parent | on HN ]
Re:The Zero-Sum Bias: When people think that everything is a... by robocat on Saturday July 06, 2019 @05:34PM (#20372113)
I think your argument somewhat presumes that we all agree on some platonic ideal of a product.

Let's pick restaurants as as product: I have some favourite restaurants that for me beat most other restaurants on multiple dimensions (taste, freshness, service, location, price). And there are very popular restaurants I rate poorly on multiple dimensions.

I know other products that I think are both cheaper and better than the competitors, but I can't think of any products where I have many many purchases within the sample space of different products.

[ Parent | on HN ]
Re:The Zero-Sum Bias: When people think that everything is a... by jacques_chester on Sunday July 07, 2019 @10:17AM (#20375177)
A nit pick: you're describing something more like perfectly competitive markets through to monopolistic competition.

The efficient market hypothesis is that the prices offered for purchase and sale factor in all relevant information about the thing being traded. It's less about whether that good is "better" or "worse" than a substitute, more about what information is revealed by prices.

[ Parent | on HN ]