How interesting, Arthur.
You know how I feel about ‘perfect information’. It’s a theoretical concept that doesn’t happen in real life. The market is ‘quick and dirty’ always trying to achieve an optimum but rarely succeeding. If Kahn had wanted to he could have called the railroad and asked about the train service, but he sensibly didn’t bother, for trains usually appear when you expect them. He sounds like a good guy in discussion. Harry ********************************** Henry George School of Social Science of Los Angeles. Box 655 Tujunga CA 91042 818 352-4141 ********************************** From: Cordell, Arthur: ECOM [mailto:[EMAIL PROTECTED] Sent: Friday, June 01, 2007 12:53 PM To: [EMAIL PROTECTED]; [EMAIL PROTECTED] Subject: RE: [Futurework] (no subject) For the record, I took my Ph.D. with Kahn (who was also the father of deregulation in the US, starting with the airlines). His point (at least in the longer article and in seminar) Kahn lives in Ithaca NY. He often went to Washington to meet with govt. In the nice weather he would always fly to Washington. In the winter when flight schedules are iffy, he would take the train. One year he went to take the train in the winter and found that the service had been cancelled. What struck him was that each time he chose to take the plane he was also making a decision against the existence of the train. Because of imperfect information he wasn't apprised of the choice. If he had perfect information he could still have taken the plane but made some sort of dollar contribution to keep the train service (with this information thousands of others might have also done the same thing) Hence The Tyranny of Small Decisions. arthur _____ From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Harry Pollard Sent: Friday, June 1, 2007 2:00 PM To: [EMAIL PROTECTED] Subject: [Futurework] (no subject) Arthur, What a terrible piece Kahn wrote. He said: "For example, the rise of the automobile and the airplane gradually made passenger railroads unprofitable, leading to increasingly deteriorating rail services as new capital and competent management became more difficult to attract. This in turn made it more rational to drive and fly. Even if the car and the airplane began to generate mounting congestion and time costs, people might still prefer the car as long as rail service deteriorated faster than the disutility of alternative transportation." I think that every time a person rides AMTRACK it costs the taxpayer something like $20 (the precise amount should be easy to find). But, in any case, driving or flying is mostly much more convenient and efficient than taking the train - perhaps except for such short well-travelled routes as New York- Washington. Otherwise, rail failed not because "new capital and competent management" were difficult to attract, but because people didn't want to travel by rail. (Freight does very well even though half of it is coal.) If some fraction of the total resources devoted to autos, highways and air travel could have been equally available to invest in improving the railroads or some other mass transit, consumers might individually have chosen the latter enough to produce a different mix of transportation means. A recent study found that the average commute time of public transport was twice that car commuters. Which would you choose? One of the best public transportation systems in the world is the London Tube, though last year in 100F summer temperatures, passengers packed like sardines were pretty ragged. London buses can take you anywhere and you rarely have to wait for more than a few minutes. Suburban trains are frequent and pretty efficient. Yet, it was necessary to institute a 'congestion charge' on car drivers to keep them out of central London. Apparently, in spite of all that first class public transportation, people still found the car is the best choice for travel. When I was a sales representative in South-East England and later in the West End, in spite of the same efficient public transport but far fewer people I found my Vespa Scooter the best way to travel around. I think Kahn wrote something that would be published rather than anything that was significant. Of course 'market failure' comes in, but I think I dealt with that. Oh, since 'transfat' became a no-no, I doubt that any snack food doesn't put "NO TRANS-FAT" on their packaging. In fact, at an Italian restaurant a couple of days ago, the menu pointed out that no trans-fat enters their cooking. Maybe many restaurants do, I don't know. Market failure - Bah! Harry ********************************** Henry George School of Social Science of Los Angeles. Box 655 Tujunga CA 91042 818 352-4141 ********************************** > -----Original Message----- > From: [EMAIL PROTECTED] [mailto:futurework- > [EMAIL PROTECTED] On Behalf Of Cordell, Arthur: ECOM > Sent: Thursday, May 31, 2007 11:47 AM > To: [EMAIL PROTECTED]; Christoph Reuss; > [EMAIL PROTECTED] > Subject: Re: [Futurework] American Way of Life makes mice ill in 1 > month > > I think what Chris is describing is a kind of Gresham's Law of quality > in the marketplace. > > "Low cost (cheapo quality, high transfat ) goods drive out high quality > higher priced (low transfat, better made) goods." So after some period > of time there is a kind of Tyranny of Small Decisions as people go for > the low cost alternative, the better quality option soon is hard to find > or is only to be found in the trendy higher income neighbourhoods. > > http://opus1journal.org/articles/article.asp?docID=140 > > "The tyranny of small decisions may be a result of consumers' failing to > take into account external costs and external benefits (i.e., market > failure), or the market's failure to offer sufficient information and > product choices (i.e., market imperfection) to consumers. But, more > importantly, it is a situation in which a series of apparently free, > individually welfare-maximizing purchase decisions can so change > consumer tastes and the context of subsequent choices that desirable > alternatives are cumulatively and irreversibly destroyed." > > > arthur > ********************************** Henry George School of Social Science of Los Angeles. 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