Dilbert author Scott Adams has suggested a giant externality-generating conspiracy in the course of trying to defend his blogging hobby as a business.
A few years ago I tried an experiment where I put the entire text of my book, "God's Debris," on the Internet for free, after sales of the hard copy and its sequel, "The Religion War" slowed. My hope was that the people who liked the free e-book would buy the sequel. According to my fan mail, people loved the free book. I know they loved it because they emailed to ask when the sequel would also be available for free. For readers of my non-Dilbert books, I inadvertently set the market value for my work at zero. Oops.So I've been watching with great interest as the band "Radiohead" pursues its experiment with pay-what-you-want downloads on the Internet. In the near term, the goodwill has inspired lots of people to pay. But I suspect many of them are placing a bet that paying a few bucks now will inspire all of their favorite bands to offer similar deals. That's when the market value of music will approach zero.
Is that really what he suspects? That there's a massive, uncoordinated conspiracy to temporarily overpay for a product to radically increase production, causing a glut that cuts prices further? Discussion questions:
- Is this the most parsimonious explanation?
- Is it plausible that this exists as a conspiracy?
- Is it plausible that this exists as a random phenomenon?
- If this kind of thing works, why not try it with, say, oil? Or, if you want to be all economical about it: why doesn't this work with any product that, like recorded music, has a very high fixed cost and a very low marginal cost? Does this explain overpaying for semiconductors in the late 90's to ensure lots of below-capacity foundries in the 2000's?
- And anyway, where does he get his data? The only sales figures I've heard for the new Radiohead album are imaginary, so what makes him think it's not like any other easily-downloaded album?
Radiohead is not revolutionary: they're just admitting that the Internet has changed the music industry; Scott Adams is not insightful: he's come up with an implausible hypothesis to explain imaginary facts. Stick to drawing comics, monkey-brain!