Wednesday, January 15, 2014

Losing to Specialists, and Competing for Attention

Economist Tim Harford has a short and pithy post, comparing some aspects of the modern consumer's experience to being in a casino. Specifically, he notes that the complex agreements that we have with (for example) cloud-connected devices are often so confusing as to be maze-like - exactly like a casino's interior, so you're less likely to act on your impulse to leave. (If you've ever stopped at a casino just to use the bathroom and spent five bewildered minutes wandering in the interior, you know what I mean.) It's been noted previously that in a complex modern economy, specialization is required - and since the consumer doesn't have the same level of understanding of their (real estate transaction, mobile device, etc.) as the specialist, there is an information asymmetry that damages modern market's efficiency.

In the same post Harford also notes the competition for attention that is increasingly part of our economy, most obviously online.

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