Musicians go it alone
Tellingly, I have not heard of any of the artists profiled. File trading alone is not a good way to build visibility -- you need promotion (like being written-up for inflight magazines) as well.
Thoughts on human interaction over the next 25 years
That means real dynamism in the campaign next year. With the web operation in place, a burst of enthusiasm after an early primary win could mean an instant infusion of web cash that could then cover a key state with advertising and keep the momentum going. One good showing in a debate and, again, the response is instant. This insta-democracy could well have its disadvantages, of course. It could remove some of the barriers that deliberately slow democratic decision-making to avoid too much fad and not enough substance. But there is no denying its power"Firstly, I must admit that I am less impressed by current democratic decision-making than Sullivan because I don't believe that making it more faddy and less substantive would alter it in the least. Indeed, I don't think anyone would even be able to tell the difference.
Crowded House: With the Web Shaking Up Music, A Free-for-All in Online Songs --- Companies Race to Stake Out Turf in Fledgling Market; A Shakeout on the Way? --- Sony vs. Wal-Mart vs. Apple
11/19/2003, 17:59 [The Wall Street Journal]
When Apple Computer Inc. started selling songs over the Internet for 99 cents each, the company had the field almost to itself. Now, just seven months later, so many competitors are jockeying for position in the music-download business that a brutal shakeout is all but certain.
A half-dozen companies have already followed Apple's lead. Roxio Inc.'s Napster, the once-renegade pioneer of Internet music, now lets you download songs at 99 cents a pop. And some of the biggest names in retail, technology and media -- including Wal-Mart Stores Inc., Microsoft Corp. and Sony Corp. -- will soon jump into the fray.
It's a rare moment in which technology has jolted an industry's business model and past practices, kicking open the door to a radical new distribution strategy. For decades, retailers have dominated the sales of physical copies of music on compact discs, vinyl and other formats. As more music fans download songs over Internet connections and organize music collections on their PCs, it suddenly isn't clear just who will sell music to consumers in the future and how.
But even as companies race to claim market share in what has rapidly become one of the hottest sectors of the Internet, online music remains unproved as a business. Profit margins appear to be so thin that many companies see song-selling sites as loss leaders to help them hawk other products.
Executives predict that the sheer number of companies rushing into the market and the likelihood of price battles will further crimp profits, leaving only a handful of significant players standing. "I think we will shrink within 12 months down to five or six or even down to three" companies in the online music market, says Sean Ryan, vice president of music services at Seattle-based RealNetworks Inc., an Internet software and services company that will soon begin selling song downloads through its Rhapsody subscription service.
But as they fight bootleggers, the record labels have finally given up on their long-held resistance to establishing a legitimate online music business. For years, the major record labels balked at licensing their song catalogs to legitimate music sites, and most of them burdened the music with unwieldy technical safeguards that prevented consumers from recording songs onto CDs or transferring them to portable music players.
Now, the labels have gone headlong in the other direction. Increasingly, the recording industry has made attractive licensing agreements far easier to come by, as it grows more comfortable with the Internet, and the terms of the contracts it strikes with online distributors become more routine.
Selling song downloads turns out to be a low-profit-margin business. Of the 99 cents Apple and other sites charge for a song, the companies pay anywhere from 65 cents to 79 cents in wholesale costs to music companies, analysts and industry executives say. Credit-card processing fees, bandwidth charges and costs related to customer service can, in some cases, eat up whatever profit is left over.
Competitors argue that Apple's dependence on the iPod is treacherous. Apple for now commands a premium for the device, but the iPod advantage may be short-lived, as competitors gradually improve their own music players. That will, in turn, increasingly put pressure on iPod profits for Apple, which has a long history of seeing its technical innovations copied by competitors. Already, competition is getting more intense: Dell Inc. recently began selling a portable music player that costs $50 less than the least expensive iPod. Samsung Electronics Co. makes a music gadget bearing the Napster logo.
Sony could make life even harder for Apple. The Japanese electronics giant has said it will introduce a competitor to iTunes in the spring that it is for now calling Music Box. Sony will also offer a family of portable music players, including a device that sells for $60, a fraction of the iPod's price tag. The company has hired Jay Samit, a music-industry veteran who worked for years on Internet deals at EMI, to help run Music Box.
Question: Mental accounting, to the extent that it violates fungibility, is (according to economic theory) irrational. Do you think there are any circumstances where mental accounting makes people better off nonetheless? How?My grader (and good buddy, compadre, and general partner in crime) thought I was loony and said so in his comments.
Mental accounting (concave value gains, steeper and convex value losses, the endowment effect, transaction utility, and multiple accounts for purchases) might make people better off in a primitive "caveman" society characterized by subsistence living, zero capital formation, a barter economy, and no law except for trust and coercion within your small community.
In a subsistence society, individuals are essentially just one big mistake away from death. So while they will seek gains they will be unwilling to take big risks to do so and when faced with a potentially catastrophic loss, they may decide to gamble. This survival instinct may result in a value function where losses loom larger than gains, and individuals are risk seeking to avoid loss while risk averse in seeking gains.
An additional effect of subsistence living is that there are essentially no savings. An evaluation mechanism that evolved under these conditions would equate gains or losses from a transaction as being equivalent as gains or losses in wealth because they are, indeed, equivalent.
Similarly, in a barter economy with weak property rights it may be reasonable to underweight opportunity cost. Firstly, property that is not proximate may be easily stolen, and secondly, the risks and inefficiencies inherent in bartering make goods less fungible. The net effect would be to only count on property that you have for sure, and not anticipate changing that property into something you value more.
Subsistence living is also zero-sum, focused on redistributing wealth not creating it. In this environment, wellbeing is tied to tracking how much each group member is getting relative to each other. In this environment, it is important to track whether or not the transaction was fair, and assume that any individual gain came from another individual’s loss. The value of goods in this environment is essentially the cost to the seller (p*) since there no opportunity to add value through capital. Since the only competition is in distribution, not production, tracking transaction utility is most important.
Finally, it's worth distinguishing between two different kinds of self control problems. The first set essentially come from a mismatch between what was biologically optimal in a primitive society but is harmful today, with sugar, salt and fat being obvious examples. There is a mismatch between our biological desires and our "rational" cognitive desires. The second set of problems is where the optimal strategy is to cheat and avoid getting caught. For example, an unwillingness to indulge in luxuries, may reflect how in a primitive society individual survival is dependent on group cooperation, even though the group is made up of competitors. Therefore the individual needs to maintain the support and trust of the group, and desires to be seen as frugal, and conscientious. In this situation, people would be more comfortable indulging their luxuries in private, and only being public about luxuries that were given to them as gifts. A luxurious gift demonstrates how important others think you are and therefore furthers your reputation as a valued member of the tribe. The same mechanism of mental accounting that separates and controls private indulgence versus public thrift may have been recruited to handle the broader variety of tasks we need to juggle in our more complex world today.
If the systematic biases uncovered in behavioral economics are universal and have a genetic basis, then it seems reasonable to suppose they were selected for in an evolutionary context. One would therefore expect them to be optimal for the primitive existence that characterizes the bulk of human existence.