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« Dentists Getting Involved in Politics - Keeping Monopoly Power Via Public Action | Main | Typepad Featured Blog »

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Donald A. Coffin

Of course, Waldfogel's point is that the supply curve intersects the vertical axis at a positive price, and that the minimum price at which a product/service is available might be fairly high.

In a world with falling transportation costs (and production costs?) this is, or may be, less of an issue. But not always.

For example, there's some evidence that the availability of physicians in smaller, more isolated towns is decreasing in the US (and maybe elsewhere), evidence that is, so far, mostly anecdote.

Donald A. Coffin

"I have moved about a thousand times. Each time I have bought new shower curtains and new shower-curtain rings. You know what? Every single time, the number of rings in a standard package has exactly matched the number of holes in the shower curtain. Amazing co-ordination, wouldn't you say?"

Let's see. Eight buns in the standard package of hot dog buns. And how many hot dogs in the standard package of hot dogs?

Um. 10.

Amazing example of failure to coordinate, wouldn't you say?

Phil

Hi Don,

Perhaps the average buyer uses 8 buns for hot dogs and 2 for brats. And even though the standard pack of dogs only has 8, there are other sizes as well. I buy, I think, a 24-pack of dogs when I get them. The brats I buy come in frozen 6-packs or I can get them fresh in any sized package I choose.

Duncan

Could you buy 10 packs of buns and 8 packs of hot dogs, so you get 80 hot dogs + bungs?

Mike Norton

Don, I'm not sure what your point is in either post... Certainly there are less Physicians in small towns because the nation (due to prefference) is becoming more and more urban. Moreover, small town doctors/pharmacists are now being paid in some areas on par with their counterparts in urban areas (even though the cost of living is almost certainly lower in rural areas). This isn't because of market failure, but because people in rural areas know that if they choose to live in the sticks or in small towns that they will likely give up some of the benefits associated with living in urban areas. In order to compensate for this they either must go without or pay more.

Also, as for your hot dog bun example... c'mon? That's the best you've got?

As Dr. Miller said in the post, go read The Long Tail by Chris Anderson. Not only will you not be worried about this market failure, but you may actually be excited for these people who have different tastes and prefferences.

Great post Dr. Miller.

Laurent GUERBY

"the market would dig up this obscure recording"

Hmmm "the market" freedom here is totally corrupted by "intellectual property" which is about the worst possible kind of big government interference with free market (and with freedom, removing nothing less than the freedom to think, to express your ideas and compete).

So this story cannot possibly be a proof that free markets are working, without copyright and with REALLY free markets there would not have been 19 years to wait and the cost would be one thousand times lower at least.

Bryan Caplan loves communism and big government.

For real free market thinking, read and think about this one:

""" Just to illustrate how great out ignorance of the optimum forms of delimitation of various rights remains - despite our confidence in the indispensability of the general institution of several property - a few remarks about one particuilar form of property may be made. [...]

The difference between these and other kinds of property rights is this: while ownership of material goods guides the user of scarce means to their most important uses, in the case of immaterial goods such as literary productions and technological inventions the ability to produce them is also limited, yet once they have come into existence, they can be indefinitely multiplied and can be made scarce only by law in order to create an inducement to produce such ideas. Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopaedias, dictionaries, textbooks and other works of reference could not be produced if, once they existed, they could freely be reproduced.

Similarly, recurrent re-examinations of the problem have not demonstrated that the obtainability of patents of invention actually enhances the flow of new technical knowledge rather than leading to wasteful concentration of research on problems whose solution in the near future can be foreseen and where, in consequence of the law, anyone who hits upon a solution a moment before the next gains the right to its exclusive use for a prolonged period."""

The Fatal Conceit: The Errors of Socialism, 1988 (p. 35) Friedrich von Hayek

Donald A. Coffin

I agree that hot dogs and buns are a more flexible set of things to match than shower curtains and curtain hooks. But, still, the mismatch is not all that easy to explain.

JBL

My reaction to this is an even more fundamental point: people tend to seriously misuse "want".

If "what you want" refers to anything you happen to have a hankering for, of course the market doesn't always provide it, and it's not at all clear that it should.

In practice, demand isn't what you "want", it's what you not only want, but are willing and able to pay for. That's ultimately true in non-market systems just as much as in market systems, market systems just make it explicit. Those fixed costs Waldfogel refers to are real costs.

It is true that markets are lumpy. If a certain product is not on the market, it can be difficult to determine what demand will be, and so it is difficult to efficiently allocate resources to its production. It's entirely possible that government could do something to collect and disseminate the relevant information. But that's a classic knowledge problem, hardly a "tyranny".

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