Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

Hot take on economics 

@freakazoid So, dynamics can turn up in various forms. I've tried (unsuccessfully) to catalogue the in the past.

There's fiat or imposed value, as with coin. Also with transjurisdictional standards, such as divorce law and shipping registries ("flags of convenience"). Whatever the *minimum* acceptable *somewhere* is, is acceptable *everywhere*.

There's effective perceived value -- Mencken's "Brayard", or consumer technologies, or bicycles.

@o @woozle

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@freakazoid Underlying quality is difficult to communicate, so some *quality indicator* is substituted. Accent. Vocabulary. Cultural myths. Clothing. Food. Table manners. Branding. Musical tastes. Books read. Schools attended. Management fads.

These signal *both* quality *and* group alignment -- and the wrong set can easily get you killed in many cases.

*Changing* signifiers is highly traumatic: culture wars and value shifts.

This also leads to cargo culting.

@o @woozle

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@dredmorbius @woozle @o These fall into a few different possibly overlapping categories: implicit bias, laziness or ignorance (because the information is available but people don't bother to look or don't know it's there), and places where it's genuinely hard to know, like interviewing and managing (though there's a lot we do know about management and interviewing so laziness and ignorance applies there).

...

@o @woozle @dredmorbius Volume also contributes to this a lot: for cheap things, the cost of research can be a significant fraction of the cost of actually buying it. This is probably why for many things there's not much of a "middle ground", just super cheap and super expensive things.

You can also get seemingly paradoxical effects where the brand with the better reputation has lower quality at a higher price point. I've noticed in general an inverse correlation between marketing and quality.

@freakazoid @dredmorbius @woozle @o

Mature markets tend to end up with two market leaders and a bunch of also-rans. In that kind of market, the #1 is often complacent and of poor quality, but the #2 tends to be better because it wants to knock the leader off the top spot.

e.g. VHS vs Betamax, Windows vs macOS, VW vs Toyota for cars, etc.

(Obviously there are counterexamples, and I think the trend is becoming less clear as markets fragment.)

@mathew @o @woozle @dredmorbius Two of the three examples you cite have strong network effects, where that's certainly true. But car manufacturers don't have this problem. Globally, in 2014 (the year I can easily find data for), the number 8 automaker by number of cars (Honda) sold almost 43% of the number of cars of the number one (Toyota). In the US, the number 7 manufacturer, Kia, sold 43% as many passenger cars as the top manufacturer, GM. And number 3, Toyota, has almost 83% of GM's sales.

@freakazoid There are some interesting exceptions, yes, but most of them show strong evidence of forces encouraging regionalisation.

The film industry is a key case in point. Reels of film, or now, digitial streams or recordings, can be transmitted virtually effortlessly worldwide. The *fixed* infrastructure of film development is largely the support industry: carpenters, casting agencies, caterers, coaches, costume & set designers, electricians.

@woozle @o @mathew

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@freakazoid ... though cars ship easily, factories don't, so it centralises, at least within countries.

(JIT and improved transport networks are changing that somewhat. Factories are more distributed in the US than they were in Detroit's heyday, but still cluster somewhat.)

But: there are both regional taste differences and economics, as well as national interests involved.

Building cars and military vehicles shares much in common, and military manufacture is ...

@woozle @o @mathew

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@dredmorbius @mathew @o @woozle Is physical colocation a problem? It's generally centralization of control or coordination that somehow discourages defection (cartels have tended to disintegrate rapidly historically) that is the problem, right? And often when a company does manage to dominate that's because new entrants have to face regulatory barriers to entry it didn't, like Amazon with sales taxes.

@freakazoid Colocation used to be highly important because there was a lot of interplay between the automanufacturers themselves and supplier pipelines. Sometimes meeting F2F and getting your mitts on metal is the best way to resolve stuff.

That's either not so much the case, or other factors matter more, but you still have forms of clustering which matter, ranging from support industries to education and infrastructure.

Early colo was driven by bulk materials.

@woozle @o @mathew

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@freakazoid Detroit was where raw iron ore and steel could be directly offloaded via ship and cars shipped by rail to mostly Eastern markets.

Interestingly, Los Angeles once featured pretty much the largest of every factory plant *outside* the primary core group, within the US. Which is to say: at LA's distance from the Rust Belt, 2ndary localisation made sense.

@woozle @o @mathew

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