… companies are aware of small cost items that improve AC system efficiency, but do not include them with the AC by default, suggesting that there is an actual price point / consumer market / confounding issue at play that prevents them doing so
Or it suggests that consumers would mostly not notice the difference in a way which meaningfully increased sales, just like I claim happens with the single-hose vs two-hose issue. For instance, I believe an insulating wrap would not change the SEER rating (because IIRC the rating measurements don’t involve the hose), so consumers would not be able to recognize the impact on performance that way. That would explain why companies don’t include them, despite the apparent low cost.
(Also in the case of hose insulation I think the effect size is much smaller than 1 vs 2 hose, so that impacts the cost-benefit too.)
“Yeah, our tech was way better, but unfortunately people wouldn’t pay 10% more for it, even though it was AMAZING compared to our competitor. We just couldn’t get them to switch.”
This is also the sort of thing which I expect usually happens because the tech is way better in ways which aren’t obvious, or whose value isn’t obvious, to the person who makes the decision about whether to purchase.
Details like “it would bump the box up to another category” can’t matter that much, because in the worst case you could just ship it separately and we already know that costs at most $20 because we can in fact get an AC hose on Amazon for $20.
And sure, I wouldn’t be surprised if I were missing some key detail that made it $40 rather than $20 (maybe connectors?), but this just isn’t plausibly going to be big enough to offset the huge effect size of a second hose.
So until that changes, it will always be more rational for companies to sell one-hose AC units in addition to their two-hose AC unit, because otherwise they’d be leaving money on the floor by only servicing part of the consumer market.
What exactly do you think you’re objecting to here? I never said companies were failing to pursue profits. The point was to explain why the companies’ profit-maximizing strategy is to sell a product which could cheaply be improved. The lack of ideal reasoning is in the consumers, not the companies.
In general, you seem to have largely lost track of what the posts are actually saying.
This experiment, for me, actually provides evidence for the way visibility to the consumer drives engineering decisions but in the opposite manner of how I think you intended it to.
It was obvious to you (visible to the consumer), prior to the experiment, that the two-hose model was superior to the one-hose model. Even after running a controlled experiment that demonstrated that both A/Cs were able to cool your apartment to a comfortable temperature, you described the one-hose model as “very shitty,” showing that even this experiment was not powerful enough to convince you that both models would suit your needs just fine. Because it’s so obvious to you that two-hose A/Cs are superior to one-hose A/Cs, you’ll probably unnecessarily overpay for the two-hose model the next time you need an A/C.
Overall, we have another datapoint of a consumer projected to make a suboptimal purchasing decision, based on an inaccurate view of his own needs and the capabilities of the options on the market. This is exactly what you were worried about before you began the experiment, and so in this sense, the overall evidence provided by this scenario supports your conclusion about “form over substance” even more perhaps than it would have if the one-hose unit hadn’t cooled your apartment effectively.
At the heart of many such complex A/C purchasing decisions, the market is recognizing a simple truth: customers are split on whether they want a cheaper one-hose or a more expensive two-hose unit. The market therefore supplies both. People who buy a model that breaks too quickly or doesn’t cool effectively either return or replace their model with a different one, and move on to more important issues. This is a system that gets almost everybody what they need at a reasonable cost, without anybody having to think too hard about it.
That said, there are all kinds of other issues with the market that parallel the Potemkin Village and Godzilla metaphores that we’re trying to articulate when we try to find metaphores for AI risk in the human world. Climate change and war are two obvious examples. We ge the illusion of free choice and private property, but actually pump out all kinds of pollution that harms other people without their consent. We see big powerful states putting disfavored minority groups in concentration camps, with zero effective resistance. Even if we don’t worry about AGI, a garden variety that helps misaligned human agents do misaligned things better can help polluters profit from pollution and oppressors oppress more effectively. That harm can compound through the whole progression of AI to AGI.
Maybe the right move is to convince people that “alignment” is a broader issue than just AI, but that AI alignment is a key part of it. Government alignment, economic alignment, cultural alignment: these are framings that could be powerful, and more resonant and familiar, and be good ways to explain the issue and garner support. I wonder what would happen if we expanded on them?
We can even consider the proposed plan (add a 2nd hose and increase the price by $20) in the context of an actual company.
The proposed plan does not actually redesign the AC unit around the fact that we now have 2 hoses. It is “just” adding an additional hose.
Let’s assume that the distribution of AC unit cooling effectively looks something like this graphic that I made in 3 seconds.
In this image, we are choosing to assume that yes, in fact, 2-hose units are more efficient on average than a 1-hose unit. We are also recognizing that perhaps there is some overlap. Perhaps there are especially bad 2-hose units, and especially good 1-hose units.
Based on all of the evidence, I’m going to say that the average 1-hose unit does represent the minimum efficiency needed for cooling in an average consumer’s use-case—i.e. it is sufficient for their needs.
When I consider what would make a 2-hose unit good or bad, I suspect it has a lot to do with how much of the design is built around the fact that there are 2-hoses.
In your proposal, we simply add a 2nd hose to a unit that was otherwise designed functionally as a 1-hose unit. Let’s consider where that might be plotted on this graph.
I’m going to claim based on vague engineering intuition / judgment / experience that it goes right here.
If I am right about where this proposal falls against the competition, then here’s what we’ve done:
This is not a 1-hose unit any more. Despite it being more efficient than the average 1-hose units, and only slightly more expensive, consumers looking at 1-hose units (because they are concerned about cost) will not see this model. The argument that it is “only $20 more expensive” is irrelevant. Their search results are filtered, they read online that they wanted a one-hose unit, this product has been removed from their consideration.
This is a bad 2-hose unit. It is at the bottom of the efficiency scale, because other 2-hose units were actually designed to take full advantage of the 2-hoses. They will beat you on efficiency, even if they cost more. Wirecutter will list this in the “also ran” when discussing 2-hose units, “So and so sells a 2-hose model, but it was barely more efficient than a 1-hose, we cannot recommend it”.
A consumer looking at 2-hose units is already selecting for efficiency over cost, so they will not buy the “just add another hose” 2-hose unit, since it is on the wrong end of the 2-hose distribution.
You will acquire a reputation as the company that sells “cheap” products—your unit is cheaper than other 2-hose units, but isn’t better because it wasn’t designed as a 2-hose unit, and it was torn apart by reviewers.
Fixing this inefficiency requires actually designing around 2-hoses, which likely results in something like this
“Minimum viable”, in the context of a “minimum viable product” or MVP, is a term in engineering that represents the minimal thing that a consumer will pay to acquire. This is a product that can actually be sold. It’s not the literal worst in its category, and it has a clear supremacy over cheaper categories. This is also called table stakes. Reviewers will consider it fairly, consumers will not rage review it, etc.
However, it’s probably also a lot more expensive than the hypothetical “only $20 more” that has been repeatedly stated.
Even in the scenario where a reviewer does consider the “just add another hose” model when viewing one-hose units, we’ve already established that the one-hose unit is cheaper (by $20! if it’s a $200 unit, that’s 10%), and that the average 1-hose unit is sufficient for some average use-case. Therefore the rational consumer choice is to buy the cheaper one-hose anyway, because it’s irrational to pay more for efficiency that isn’t needed![1][2]
The exception here is some hypothetical consumer who knows, for a fact, that their unique situation requires a two-hose unit, e.g. they tried a one-hose unit already and it was insufficient.
There’s also an argument here that a rational option is to buy a 1-hose unit, and then if you need slightly more efficiency, just buy & wrap the 1-hose with insulation, as described here. This allows the consumer to purchase at the lower price point and then add efficiency if needed for the cost of the insulation. It’s unclear to me that the “just add another hose” AC would still perform better than an insulated 1-hose.
As a concrete example of rational one-hosing, here in the Netherlands it rarely gets hot enough that ACs are necessary, but when it does a bunch of elderly people die of heat stroke. Thus, ACs are expected to run only several days per year (so efficiency concerns are negligible), but having one can save your life.
I checked the biggest Dutch-only consumer-facing online retailer for various goods (bol.com). Unfortunately I looked before making a prediction for how many one-hose vs two-hose models they sell, but even conditional on me choosing to make a point of this, it still seems like it could be useful for readers to make a prediction at this point. Out of 694 models of air conditioner labeled as either one-hose or two-hose,
3
are two-hose.
This seems like strong evidence that the market successfully adapts to actual consumer needs where air conditioner hose count is concerned.
I must admit I was surprised by the statistics here. It is true if you only use the air conditioner few days a year, the energy efficiency is not important. However, the cooling capacity is important. I think many people are using efficiency to mean cooling capacity above. Anyway, let’s say the incremental cost of going from one hose to two hoses is $30. From working on Department of Energy energy efficiency rules, typically the marginal markup of an efficient product is less than the markup on the product overall (meaning that the incremental cost of just adding a hose is less than the $20 of buying it separately). It is true that with a smaller area for the air to come into the device with a hose, the velocity has to be higher, so the fan blades need to be made bigger (it typically is one motor powering two different fan blades on two sides, at least for window units). But then you could save money on the housing because the port is smaller. The incremental cost of motors is low. Then if the air conditioner cost $200 to start with, that would be 15% incremental cost. Then let’s say the cooling capacity increased by 25% (I would say it actually does matter that a T-shirt was used, which would allow room area and instead of just outdoor air, so it probably would be higher than this). What this means is that the two hose actually has greater cooling capacity per dollar, so you should choose a small two hose even if you don’t care about energy use at all. Strictly this is only true with no economies of scale, which is not a great assumption. But I think overall it will hold. Another case this would break down is if a person were plugging and unplugging many times, but I don’t think that’s the typical person. So I suspect what is going on is that people don’t realize that the cooling capacity of the one hose is actually reduced more than the cost, so they should just be getting a smaller capacity two hose unit (at lower initial cost and energy cost).
There is a broader question here of whether there should be energy efficiency regulations. If people were perfectly rational and had perfect information, we would not need them. But not only are the incremental costs of energy efficiency regulations found to be economically beneficial by the US Department of Energy (basically a good return on investment), but a retrospective study found that the actual incremental cost of meeting the efficiency regulations was about an order of magnitude lower than predicted by the Department of Energy! So I think there’s a very strong case for energy efficiency regulations.
For that one week of the year its very hot then any kind of air conditioner at all, even one with awful cooling power, is probably enough. If you can get a two-hose unit where the machinery is half the size of the 1-hose, and is proportionally cheaper then you should. But its worth remembering that the consumers know they are buying a piece of cheap junk: they intend to have it fan away at them for a week while they complain about how it never used to get this hot. Three years later there will be another heat wave, and (if they are anything like me) they will not be sure if they still have the air con they bought last time in their attic, or if they lost it in the house move. Or maybe it broke? So their is a very real chance that it is never being used again from 10 days after purchase: and the buyer knows that.
It was obvious to you (visible to the consumer), prior to the experiment, that the two-hose model was superior to the one-hose model. Even after running a controlled experiment that demonstrated that both A/Cs were able to cool his apartment to a comfortable temperature, you described the one-hose model as “very shitty,” showing that even this experiment was not powerful enough to convince you that both models would suit your needs just fine. Because it’s so obvious to you that two-hose A/Cs are superior to one-hose A/Cs, you’ll probably unnecessarily overpay for the two-hose model the next time you need an A/C.
Obviously I disagree, but I’d still say that’s a pretty fair interpretation.
Or it suggests that consumers would mostly not notice the difference in a way which meaningfully increased sales, just like I claim happens with the single-hose vs two-hose issue. For instance, I believe an insulating wrap would not change the SEER rating (because IIRC the rating measurements don’t involve the hose), so consumers would not be able to recognize the impact on performance that way. That would explain why companies don’t include them, despite the apparent low cost.
(Also in the case of hose insulation I think the effect size is much smaller than 1 vs 2 hose, so that impacts the cost-benefit too.)
This is also the sort of thing which I expect usually happens because the tech is way better in ways which aren’t obvious, or whose value isn’t obvious, to the person who makes the decision about whether to purchase.
Details like “it would bump the box up to another category” can’t matter that much, because in the worst case you could just ship it separately and we already know that costs at most $20 because we can in fact get an AC hose on Amazon for $20.
And sure, I wouldn’t be surprised if I were missing some key detail that made it $40 rather than $20 (maybe connectors?), but this just isn’t plausibly going to be big enough to offset the huge effect size of a second hose.
What exactly do you think you’re objecting to here? I never said companies were failing to pursue profits. The point was to explain why the companies’ profit-maximizing strategy is to sell a product which could cheaply be improved. The lack of ideal reasoning is in the consumers, not the companies.
In general, you seem to have largely lost track of what the posts are actually saying.
This experiment, for me, actually provides evidence for the way visibility to the consumer drives engineering decisions but in the opposite manner of how I think you intended it to.
It was obvious to you (visible to the consumer), prior to the experiment, that the two-hose model was superior to the one-hose model. Even after running a controlled experiment that demonstrated that both A/Cs were able to cool your apartment to a comfortable temperature, you described the one-hose model as “very shitty,” showing that even this experiment was not powerful enough to convince you that both models would suit your needs just fine. Because it’s so obvious to you that two-hose A/Cs are superior to one-hose A/Cs, you’ll probably unnecessarily overpay for the two-hose model the next time you need an A/C.
Overall, we have another datapoint of a consumer projected to make a suboptimal purchasing decision, based on an inaccurate view of his own needs and the capabilities of the options on the market. This is exactly what you were worried about before you began the experiment, and so in this sense, the overall evidence provided by this scenario supports your conclusion about “form over substance” even more perhaps than it would have if the one-hose unit hadn’t cooled your apartment effectively.
At the heart of many such complex A/C purchasing decisions, the market is recognizing a simple truth: customers are split on whether they want a cheaper one-hose or a more expensive two-hose unit. The market therefore supplies both. People who buy a model that breaks too quickly or doesn’t cool effectively either return or replace their model with a different one, and move on to more important issues. This is a system that gets almost everybody what they need at a reasonable cost, without anybody having to think too hard about it.
That said, there are all kinds of other issues with the market that parallel the Potemkin Village and Godzilla metaphores that we’re trying to articulate when we try to find metaphores for AI risk in the human world. Climate change and war are two obvious examples. We ge the illusion of free choice and private property, but actually pump out all kinds of pollution that harms other people without their consent. We see big powerful states putting disfavored minority groups in concentration camps, with zero effective resistance. Even if we don’t worry about AGI, a garden variety that helps misaligned human agents do misaligned things better can help polluters profit from pollution and oppressors oppress more effectively. That harm can compound through the whole progression of AI to AGI.
Maybe the right move is to convince people that “alignment” is a broader issue than just AI, but that AI alignment is a key part of it. Government alignment, economic alignment, cultural alignment: these are framings that could be powerful, and more resonant and familiar, and be good ways to explain the issue and garner support. I wonder what would happen if we expanded on them?
We can even consider the proposed plan (add a 2nd hose and increase the price by $20) in the context of an actual company.
The proposed plan does not actually redesign the AC unit around the fact that we now have 2 hoses. It is “just” adding an additional hose.
Let’s assume that the distribution of AC unit cooling effectively looks something like this graphic that I made in 3 seconds.
In this image, we are choosing to assume that yes, in fact, 2-hose units are more efficient on average than a 1-hose unit. We are also recognizing that perhaps there is some overlap. Perhaps there are especially bad 2-hose units, and especially good 1-hose units.
Based on all of the evidence, I’m going to say that the average 1-hose unit does represent the minimum efficiency needed for cooling in an average consumer’s use-case—i.e. it is sufficient for their needs.
When I consider what would make a 2-hose unit good or bad, I suspect it has a lot to do with how much of the design is built around the fact that there are 2-hoses.
In your proposal, we simply add a 2nd hose to a unit that was otherwise designed functionally as a 1-hose unit. Let’s consider where that might be plotted on this graph.
I’m going to claim based on vague engineering intuition / judgment / experience that it goes right here.
If I am right about where this proposal falls against the competition, then here’s what we’ve done:
This is not a 1-hose unit any more. Despite it being more efficient than the average 1-hose units, and only slightly more expensive, consumers looking at 1-hose units (because they are concerned about cost) will not see this model. The argument that it is “only $20 more expensive” is irrelevant. Their search results are filtered, they read online that they wanted a one-hose unit, this product has been removed from their consideration.
This is a bad 2-hose unit. It is at the bottom of the efficiency scale, because other 2-hose units were actually designed to take full advantage of the 2-hoses. They will beat you on efficiency, even if they cost more. Wirecutter will list this in the “also ran” when discussing 2-hose units, “So and so sells a 2-hose model, but it was barely more efficient than a 1-hose, we cannot recommend it”.
A consumer looking at 2-hose units is already selecting for efficiency over cost, so they will not buy the “just add another hose” 2-hose unit, since it is on the wrong end of the 2-hose distribution.
You will acquire a reputation as the company that sells “cheap” products—your unit is cheaper than other 2-hose units, but isn’t better because it wasn’t designed as a 2-hose unit, and it was torn apart by reviewers.
Fixing this inefficiency requires actually designing around 2-hoses, which likely results in something like this
“Minimum viable”, in the context of a “minimum viable product” or MVP, is a term in engineering that represents the minimal thing that a consumer will pay to acquire. This is a product that can actually be sold. It’s not the literal worst in its category, and it has a clear supremacy over cheaper categories. This is also called table stakes. Reviewers will consider it fairly, consumers will not rage review it, etc.
However, it’s probably also a lot more expensive than the hypothetical “only $20 more” that has been repeatedly stated.
Even in the scenario where a reviewer does consider the “just add another hose” model when viewing one-hose units, we’ve already established that the one-hose unit is cheaper (by $20! if it’s a $200 unit, that’s 10%), and that the average 1-hose unit is sufficient for some average use-case. Therefore the rational consumer choice is to buy the cheaper one-hose anyway, because it’s irrational to pay more for efficiency that isn’t needed![1][2]
The exception here is some hypothetical consumer who knows, for a fact, that their unique situation requires a two-hose unit, e.g. they tried a one-hose unit already and it was insufficient.
There’s also an argument here that a rational option is to buy a 1-hose unit, and then if you need slightly more efficiency, just buy & wrap the 1-hose with insulation, as described here. This allows the consumer to purchase at the lower price point and then add efficiency if needed for the cost of the insulation. It’s unclear to me that the “just add another hose” AC would still perform better than an insulated 1-hose.
As a concrete example of rational one-hosing, here in the Netherlands it rarely gets hot enough that ACs are necessary, but when it does a bunch of elderly people die of heat stroke. Thus, ACs are expected to run only several days per year (so efficiency concerns are negligible), but having one can save your life.
I checked the biggest Dutch-only consumer-facing online retailer for various goods (bol.com). Unfortunately I looked before making a prediction for how many one-hose vs two-hose models they sell, but even conditional on me choosing to make a point of this, it still seems like it could be useful for readers to make a prediction at this point. Out of 694 models of air conditioner labeled as either one-hose or two-hose,
3
are two-hose.
This seems like strong evidence that the market successfully adapts to actual consumer needs where air conditioner hose count is concerned.
I must admit I was surprised by the statistics here. It is true if you only use the air conditioner few days a year, the energy efficiency is not important. However, the cooling capacity is important. I think many people are using efficiency to mean cooling capacity above. Anyway, let’s say the incremental cost of going from one hose to two hoses is $30. From working on Department of Energy energy efficiency rules, typically the marginal markup of an efficient product is less than the markup on the product overall (meaning that the incremental cost of just adding a hose is less than the $20 of buying it separately). It is true that with a smaller area for the air to come into the device with a hose, the velocity has to be higher, so the fan blades need to be made bigger (it typically is one motor powering two different fan blades on two sides, at least for window units). But then you could save money on the housing because the port is smaller. The incremental cost of motors is low. Then if the air conditioner cost $200 to start with, that would be 15% incremental cost. Then let’s say the cooling capacity increased by 25% (I would say it actually does matter that a T-shirt was used, which would allow room area and instead of just outdoor air, so it probably would be higher than this). What this means is that the two hose actually has greater cooling capacity per dollar, so you should choose a small two hose even if you don’t care about energy use at all. Strictly this is only true with no economies of scale, which is not a great assumption. But I think overall it will hold. Another case this would break down is if a person were plugging and unplugging many times, but I don’t think that’s the typical person. So I suspect what is going on is that people don’t realize that the cooling capacity of the one hose is actually reduced more than the cost, so they should just be getting a smaller capacity two hose unit (at lower initial cost and energy cost).
There is a broader question here of whether there should be energy efficiency regulations. If people were perfectly rational and had perfect information, we would not need them. But not only are the incremental costs of energy efficiency regulations found to be economically beneficial by the US Department of Energy (basically a good return on investment), but a retrospective study found that the actual incremental cost of meeting the efficiency regulations was about an order of magnitude lower than predicted by the Department of Energy! So I think there’s a very strong case for energy efficiency regulations.
“has greater cooling capacity per dollar”
For that one week of the year its very hot then any kind of air conditioner at all, even one with awful cooling power, is probably enough. If you can get a two-hose unit where the machinery is half the size of the 1-hose, and is proportionally cheaper then you should. But its worth remembering that the consumers know they are buying a piece of cheap junk: they intend to have it fan away at them for a week while they complain about how it never used to get this hot. Three years later there will be another heat wave, and (if they are anything like me) they will not be sure if they still have the air con they bought last time in their attic, or if they lost it in the house move. Or maybe it broke? So their is a very real chance that it is never being used again from 10 days after purchase: and the buyer knows that.
This is a great comment. The graphs helped a lot.
Obviously I disagree, but I’d still say that’s a pretty fair interpretation.