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Comment: Contralual capture? (Score 3, Interesting) 200

by plopez (#48608277) Attached to: NASA's $349 Million Empty Tower

I wonder if "contractual capture" had something to do with it. What I mean is, much like the F-35, there was some sort of "poison pill" in the contract that made it impossible to cancel the contract without paying a hefty penalty. Much like firing a CEO these days, where they make more money by getting fired.

Comment: Re:Supply and demand (Score 1) 190

by plopez (#48607079) Attached to: Why Didn't Sidecar's Flex Pricing Work?

"it gets very complex very quickly."
Which is part of the point. There is no quick easy or straight forward explanation. You can look at it from a modeling perspective as just an optimization problem but the number of factors and the fact that many of the factors may have feedback loops that practically speaking appealing to simple curves does not do a good job of explaining the observed phenomenon. The is more going on that simply some n-dimensional saddle point.

"The only assumption is, that information is known eventually."
But the information is not required "eventually" (eventually we are all dead, to mangle a famous quote). It is needed immediately by both buyers and sellers all up and down the supply or service chain.

In terms of the rules of the game, disruptive technology is an important factor. The fundamentally attack pricing structure and I sincerely doubt that any human actor or organization can know what the fall out will be. Which muddies the decision making process. Should we continue to make carriage bodies or should we adapt our business to supply the guy down the road working on that new fangled auto-mobile thing? We can sell a good 10K carriage bodies a year while that geek only sold 200 of his auto-mobiles. The smart money goes with the sure thing, doesn't it?

Should we continue making clips the old way or retool and spend huge sums on replacing all our injection and blow molding equipment? How do we know it is not a fad? How do we get the information we need to make a good market decision. Short answer, you can't. Ever.

Comment: Re:Supply and demand (Score 1) 190

by plopez (#48602117) Attached to: Why Didn't Sidecar's Flex Pricing Work?

There are quite a few assumptions there including the fact that a free market will spring up without government intervention. Actually the post did make a good point in that economics is never that simple. We do not live in an economics 101 universe. Supply and demand curves are unrealistic in that they do not take into account competition, captured markets, shortages of raw material, labor shortages, lack of capital, disruptive technologies, and they assume instant information exchange. Econ 101 is about as realistic as Physics 101 where they reference the 'frictionless plane'.

And don't forget Psychology. Despite all the fancy equations and obscure terminology Econ. is essentially a Social Science. A sloppy and unethical one at that.

It all comes down to this from the article "But I think the simpler answer is that the free market is just not the meritocracy that people think it is".

"Free markets select for winning solutions." -- Eric S. Raymond