On 9/24/07, jon louis mann <[EMAIL PROTECTED]> wrote: > > not sure waht you mean about-- > -- a feedback-based market can't self-regulate > goods and services that violate the law of diminishing > returns, a/k/a network effects.
For most products, the more you sell, the lower the marginal value -- that's decreasing returns. In products subject to network effects, the more you sell, the more valuable each one becomes. If there's one telephone on a network, it is worthless. If there are two, it's worth something, but not much. As more people have them, each one can call more people, so the value of each phone goes up. It's the same with operating systems. The more you sell, the more valuable the operating system itself becomes, since it's more attractive to software developers when there are more users. A feedback-based system can't self-regulate this because whoever gets ahead first is close to assured of dominating. In the usual sort of market, profits decrease as you gain market share, so that one company's success _opens_ the door to competition -- and thus the feedback of the market's "invisible hand" -- instead of closing it. Nick -- Nick Arnett [EMAIL PROTECTED] Messages: 408-904-7198 _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
