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Path Dependence, Imperfect Markets, etc.

Started by TLF · 11 months ago

2 comments

  • Matt S

    1 year ago

    Well said Tim. I would make the more subtle point that libertarians of my stripe don't necessarily think that markets produce a single "best" product. They produce the best *outcome*, which is to say, the outcome that best serves the needs of the individuals that participate in the market -- multiple products covering a wider swath of consumer desires.




    Also, it's a bit apples-to-oranges in comparing the OS market to the HD format war.





    In the former, there is clearly room for more than one OS. The market has produced a plurality, with MS, Apple and Linux, plus the mobile OSs.





    In the case of HD formats, that's a bit more of a cartel-ish situation. It's rare that such standards are competitive for any period of time. In fact, the industry could not move forward until the coalesced around a single technology.

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  • eee_eff

    1 year ago

    So I don’t think libertarians have any particular reason to get invested in debates about the importance of path dependence. If it were demonstrated that Blu-Ray won the format war by bribing Hollywood studios to support it, that wouldn’t especially undercut the case for free markets in consumer electronics unless you could simultaneously demonstrate that some other arrangement (devices designed by a federal agency?) would do better.

    But if they won the format wars by bribing a government official, that would suddenly not be OK in libertarian theory. Which just shows that libertarianism is making a huge informational exclusion, being categorically unable to find offense with wrongs of private enterprise (perhaps they even have a defence for Bhopal disaster) but being able to see the slightest action by a government (providing for public schools, for example) as wrong.
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