Economic and Game Theory
|"Inside every small problem is a large problem struggling to get out."|
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For one there is apparent confusion about "what the product is." For example, when i buy a car, one would assume i am paying for the physical state of the car, if i buy potatos i am paying for the physical state of the potatos. However If i buy a CD, i am paying not for the physical product of the CD per se, but for the right to listen/view the content therein (or else i would go down to the shop and get blank CD disc instead). Similarly, if i buy a ticket to disney land, i'm not buying the actual piece of paper, but the right to enjoy the 'disney experience.' (it follow if i really wanted that piece of paper i'll go down to the stationers). These are cases of intangibles'.
Let us consider the rental industry then. If i rent a house, i have full use of it and am allowed to live in it and exercise control over it for x amount of years. But it would be absolutely absurd to suggest that i could resell the house on the open market! Using the logic of the authors then, it would suggest that the landlords are 'monopolists' trying to regulate future use of the properties.
It would be interesting to note that a CD buyer is allowed to resell their CD on the market in direct competition with the supplier, just as in the case of cars, potatos and the like. This is why we have second-hand CD shops and even a used music section on Amazon.com. This is an area where i believe the authors have overlooked. [Manage messages]