Subject: Re: near/medium future digital media economics
From: "Stephen J. Turnbull" <turnbull@sk.tsukuba.ac.jp>
Date: Sun, 21 May 2006 20:36:39 +0900

>>>>> "Ben" == Ben Tilly <btilly@gmail.com> writes:

    Ben> You don't necessarily know how to readily quantify [the value
    Ben> of a potential connection] (truthfully neither do I, though
    Ben> I've put some energy into it), but it *means* something to
    Ben> you.  You have a referent in your experience for it.

Which is different from yours, and therefore I cannot extract meaning
from it.  Maybe you just haven't lived in Japan, or watched a Mormon
missionary at work.  I've done both, and I know that although I can't
quantify that value very well, I can say for sure that until we agree
on quantification to some degree, we aren't communicating.

Note that I don't ask that we agree on which quantification is
appropriate at this stage.  Just that at any given point we agree on
which measure is under discussion.

    Ben> The more quantifiable a measurement of value is, the easier
    Ben> it is to argue that "this isn't what I mean by value!"  I
    Ben> agree that it is a debatable measure of value.  But [count of
    Ben> data items returned] is not an unreasonable one, and it has
    Ben> the strong benefit that I at least have some idea how to
    Ben> quantify it.

It *is* unreasonable.  Not because it's unreasonable per se, but
because we know that it's reasonable only as an average of very
different extremes.

On the one hand, if you're assembling a statistical data set, then
there's decreasing returns.  In the realm of economics, a statistic
based on 300 observations is much more accurate than one based on 30
observations, but increasing that to 3000 observations buys very
little, and going from there to 30000 buys nothing at all.

On the other, if you're searching for a specific thing, you get no
returns until you find it, then you get a discontinuous jump when you
do find it.  Increasing returns with a vengeance that would satisfy
even the Godfather.

    >> You're forgetting that I'm a coarse-filtered economist, who
    >> only knows of three kinds of scaling behavior: decreasing
    >> returns to scale, constant returns to scale, and increasing
    >> returns to scale.  Obviously, I will find that O(n^2) and O(n
    >> log n) are in the identical class.

    Ben> In which case you don't care about the entire subject and we
    Ben> can skip this conversation. :-P

I do care because *you* distinguish.  For the purposes of
understanding "Tom's Problem" I think that's a mistake.  YM obviously
does V, but anyway, I think it needs discussion.

    Ben> It used to be easy for me to predict who would use Macs.
    Ben> However there are now a lot of people using them who didn't
    Ben> not that long ago, and predicting is getting harder... :-)

Aside: In my experience the Mac newbies are people like me, who insist
on a man's OS for a man's work, but like the occasional eye candy
too (or need "Official Doc2Text" to deal with those colleagues still
trapped on the Great Wheel).

    >> Two is not competition.

    Ben> It is more competition than one...

You can't quantify things that way.  There are models which are
plausible in some situations which give competition; there are models
which give more competition than price-taking behavior would give
("patent races" are a standard example); and there are models which
give monopoly behavior, without explicit collusion.  Almost all of
these models do converge to price-taking behavior as n -> infinity,
though.


-- 
Graduate School of Systems and Information Engineering   University of Tsukuba
http://turnbull.sk.tsukuba.ac.jp/        Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
        Economics of Information Communication and Computation Systems
          Experimental Economics, Microeconomic Theory, Game Theory