Tuesday, August 24, 2004


News and an Ice Cream rant

Okay, news stories...

Via the ever popular geek press, online gamers are outsourcing the boring stuff which leads me to wonder why they play the games in the first place if they are so boring...as a corollary, why do the game designers make them so "boring?"

As usual, Glen over at Agorophilia has an interesting analysis on the olympic medals controversy (one of them).

The economist has an interesting article on what the stock market may hold in terms of returns over the next decade. This isn't the first article to say that returns would be lower than we have grown accustomed. Of course we shouldn't expect returns to be 10% regardless of what the history of the market has been. If a well diversified portfolio isn't really all that risky (as we are continually told) then we should not expect an above average return on investment. There are many theories and explanations for why the market has enjoyed such a long run at providing above average returns, but explaining the above average returns and expecting them to continue are two seperate things. I have never believed that privatizing social security should be argued based upon "look how much more they could be getting," precisely because I think it is ridiculous to assume future returns of the same rate, especially if more people enter the stock market driving down the premium earned. There are other reasons to argue for privatizing (though I secretly hope that it will occur just as I'm about to retire so I can cash out on a massive high). Anyway, the article is there for your perusal.

Nothing else right now...

except a question that has been rattling round in my head for awhile. Jason will probably think its nuts that I haven't let this go yet, but I am still trying to explain why when I go to an ice cream store I don't get charged different amounts depending on the type of ice cream I am buying. The cost of producing vanilla is different than producing Cherries Jubilee or Chocolate Chip Cookie Dough. The demand is most certainly different. As Jason and I discussed, it seems likely that it is a product which has a high degree of substitution. How many times have you been stuck behind someone in line while they try to decide what type of ice cream to buy? But I still find that answer highly unsatisfactory. I'm not saying the price should be wildly different for the different types of ice cream, I'm just questioning the idea that the equilibrium price is identical for all flavors of ice cream. It may just be a question of transaction costs of dealing with 30 different prices x all of the different sizes available. That doesn't explain ice cream at the grocery store though. It doesn't explain that ice cream being the same price. I don't get charged the same price for my healthy choice meat loaf as I do for my healthy choice chicken picata.

I'm sure it is probably a mixture of these explanations plus other variables I haven't even considered yet. Still, it makes me a bit uneasy. What makes me most uneasy is when I get to the ice cream store late at night and they are out of my particular flavor and I curse them for not charging more so that I could have my flavor.



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