From: Eliezer S. Yudkowsky (sentience@pobox.com)
Date: Fri Jul 09 1999 - 00:20:22 MDT
John Clark wrote:
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> Robert J. Bradbury <bradbury@aeiveos.com> On July 05, 1999
>
> >In a highly competitive environment, you cannot make the
> >investments necessary for long term R&D projects.
>
> Nonsense. In a highly competitive environment you must make
> long term R &D projects or you're dead.
Why blame it on the government? Actually, this is the stock market's
fault. With everyone after you for short-term profits, nobody can...
We all have our personal boogaboos, but Bradbury has a point. The
problem is neither monolithic government nor monolithic investors, but
monolithic companies and consumers with incomplete information. To
quote Quidnunc:
"If one of your competitors, or a new entrant into the market, offers a
deal marginally better than yours you will, naturally enough, lose
market share. In today's physical world, you can expect a few weeks to
react; in tomorrow's instant market, you have seconds before your share
of new deals drops to zero."
By junking all R&D, you can shave a cent off your selling price and get
all the products on the market. The problem is similar to the reason
that an oversupply can sometimes cause people to sell at a loss - if
there are 1001 sellers and 1000 buyers, then maybe 1000 sellers are
selling at a break-even price, but the last seller has a motive to sell
at less than break-even to minimize the loss. The solution to this one
is (a) complex barter to make demand increase with supply; (b) a
ubiquitous futures market.
The solution to the R&D suboptimization problem is (a) completely
informed consumers; (b) patent monopolies used to fund further research;
(c) separate R&D companies or separately traded ("investable") R&D divisions.
--
sentience@pobox.com Eliezer S. Yudkowsky
http://pobox.com/~sentience/tmol-faq/meaningoflife.html
Running on BeOS Typing in Dvorak Programming with Patterns
Voting for Libertarians Heading for Singularity There Is A Better Way
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