Within the constraints of GEM, a ‘better mousetrap’ is one that customers agree is better.
Within the constraints of GEM, a ‘better mousetrap’ is one that customers agree is better.
This is similar to saying “Within the constraints of GEM, it only counts as a $10 bill lying on the ground if people know it’s there. ”
The EMH, in theory, applies to the value people get from a thing, whether or not they know the value. It may be that there’s a mousetrap that makes it less likely other mice would come, and saves me money in the long run.
If I understood and believed that, I would buy the mousetrap no question, even though it’s more expensive. However, there’s a cost to educating me on top of the cost of just building the mousetrap.
The EMH has all sorts of weaknesses and holes, but the biggest weaknesses are around “innovation”—both finding new innovations, and propagating them through the marketplace. See the issues of asymmetric information, the innovator’s dilemma, etc.
In other words, I think @johnwentsworth was being too optimistic in his assessment: innovations of any kind will run into this issue, whether they have a market attached or not.
Mhmmm, I think we’re both in agreement that GEM is a good model neither for new mousetraps nor new scientific discoveries… The interesting question for me is: Does the model break down in the same way for both?
For mousetraps, it has the implicit problems with ignoring the effects of marketing on customer decision.
For academic theories, it has the implicit problem where the *consumers* (the scientific community, which is presented with multiple theories and forms a consensus around zero or more of them) is being misstated as the producer.
You can get paid for seeing an error in someone’s mousetrap design and making a design that lacks that error, even if the error is “bad marketing”. You can’t get paid for seeing an error in a mousetrap buyer, especially if that error is “ignores the exemplary marketing or otherwise makes decisions based on the wrong factors”.
Academia pays in prestige, but it doesn’t pay in prestige for “doesn’t join or change the consensus”; it pays a little bit to join the consensus and a fair bit more for publishing results that change the consensus, but joining it is much easier than changing it.
Is someone has a theory that’s badly marketed in academia, you can earn in prestige for appropriating the theory and pushing it with better marketing/framing.
This is similar to saying “Within the constraints of GEM, it only counts as a $10 bill lying on the ground if people know it’s there. ”
The EMH, in theory, applies to the value people get from a thing, whether or not they know the value. It may be that there’s a mousetrap that makes it less likely other mice would come, and saves me money in the long run.
If I understood and believed that, I would buy the mousetrap no question, even though it’s more expensive. However, there’s a cost to educating me on top of the cost of just building the mousetrap.
The EMH has all sorts of weaknesses and holes, but the biggest weaknesses are around “innovation”—both finding new innovations, and propagating them through the marketplace. See the issues of asymmetric information, the innovator’s dilemma, etc.
In other words, I think @johnwentsworth was being too optimistic in his assessment: innovations of any kind will run into this issue, whether they have a market attached or not.
Yes, GEM does not permit there to be money on the ground. It’s one of the limitations of the model.
Which is a great reason to not use it to model situations where there is money on the ground.
Mhmmm, I think we’re both in agreement that GEM is a good model neither for new mousetraps nor new scientific discoveries… The interesting question for me is: Does the model break down in the same way for both?
No, and yes.
For mousetraps, it has the implicit problems with ignoring the effects of marketing on customer decision.
For academic theories, it has the implicit problem where the *consumers* (the scientific community, which is presented with multiple theories and forms a consensus around zero or more of them) is being misstated as the producer.
You can get paid for seeing an error in someone’s mousetrap design and making a design that lacks that error, even if the error is “bad marketing”. You can’t get paid for seeing an error in a mousetrap buyer, especially if that error is “ignores the exemplary marketing or otherwise makes decisions based on the wrong factors”.
Academia pays in prestige, but it doesn’t pay in prestige for “doesn’t join or change the consensus”; it pays a little bit to join the consensus and a fair bit more for publishing results that change the consensus, but joining it is much easier than changing it.
Is someone has a theory that’s badly marketed in academia, you can earn in prestige for appropriating the theory and pushing it with better marketing/framing.