Paul Krugman Joins The Infinite Goods Brigade

from the the-concept-is-getting-through dept

It looks like Paul Krugman is the latest economist to join the growing group of folks who recognize the impact of infinite goods on business models -- and how it's not a bad thing, just an inevitable shift in the market. Unfortunately, his writeup on the issue is a little weak. He references Esther Dyson's predictions about this from fourteen years ago and the recent Rolling Stone article we discussed last month. What's disappointing is that, as an economist, he should have been able to look at the fundamental economics and understand why this makes sense, but he chooses not to do so. That leaves him open to criticism. The next stage of this debate is going to be showing, fundamentally, why this inevitable change isn't a bad thing. Some people already recognize this, but it clearly is going to require a lot more convincing evidence.
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Filed Under: business models, economics, infinite goods, paul krugman


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  1. identicon
    Chronno S. Trigger, 6 Jun 2008 @ 1:56pm

    Re: Re: yes, dorpus

    The music may be a near infinite good but the people who will download the good are finite. There are only so many people who will download any one song so, threw the theory of supply and demand, the cost of that near infinet item will drop to near $0.

    The cost of the HDD douse not come into play in that calculation. The cost of the HDD comes into play to determent the finite number of people who will download the music. As the price of the finite good (the USB HDD) goes up the number of people who are willing to purchase that device, and in turn download the song, will drop.

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