Comments on: I Don’t Know the Economics Term for This http://www.coyoteblog.com/coyote_blog/2005/08/i_dont_know_the.html Dispatches from a Small Business Sun, 12 Feb 2012 09:39:47 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Tom http://www.coyoteblog.com/coyote_blog/2005/08/i_dont_know_the.html/comment-page-1#comment-1629 Tom Mon, 15 Aug 2005 21:18:42 +0000 http://coyote-blog.com/wordpress/2005/08/i_dont_know_the.html#comment-1629 <p>Earl said: "Alternatively, it could be called transaction costs/information costs. The latter being the great failing of libertarians." Please elaborate about the "failing of libertarians."</p> <p>My take: If all of this is being done by private actors who aren't substantially subsidized by taxpayers (some subsidization is inescapable given differential tax treatment, zoning, etc.), there is no failure. Mistakes are the price we pay for liberty. Those who prosper in the long run are those who, other things being the same, learn from their mistakes.</p> Earl said: “Alternatively, it could be called transaction costs/information costs. The latter being the great failing of libertarians.” Please elaborate about the “failing of libertarians.”

My take: If all of this is being done by private actors who aren’t substantially subsidized by taxpayers (some subsidization is inescapable given differential tax treatment, zoning, etc.), there is no failure. Mistakes are the price we pay for liberty. Those who prosper in the long run are those who, other things being the same, learn from their mistakes.

]]> By: Earl http://www.coyoteblog.com/coyote_blog/2005/08/i_dont_know_the.html/comment-page-1#comment-1628 Earl Mon, 15 Aug 2005 18:55:47 +0000 http://coyote-blog.com/wordpress/2005/08/i_dont_know_the.html#comment-1628 <p>As an economist finishing an undergraduate degree, I'd call it either an information failure (asymmetrical information) -- ie, there exists different information between the sellers and purchasers WRT the desires of the purchasers. This typically refers to the seller having more information than the buyer, such as used car vendors, etc. However, I think that you could use the term in this situation.</p> <p>Alternatively, it could be called transaction costs/information costs. The latter being the great failing of libertarians. </p> <p>Earl</p> As an economist finishing an undergraduate degree, I’d call it either an information failure (asymmetrical information) — ie, there exists different information between the sellers and purchasers WRT the desires of the purchasers. This typically refers to the seller having more information than the buyer, such as used car vendors, etc. However, I think that you could use the term in this situation.

Alternatively, it could be called transaction costs/information costs. The latter being the great failing of libertarians.

Earl

]]> By: Don Lloyd http://www.coyoteblog.com/coyote_blog/2005/08/i_dont_know_the.html/comment-page-1#comment-1627 Don Lloyd Mon, 15 Aug 2005 17:34:12 +0000 http://coyote-blog.com/wordpress/2005/08/i_dont_know_the.html#comment-1627 <p>The question arises as to just who the investor expects to be selling to. If it is another future investor, then choosing the most popular style represents a lower risk because the market being sold into will be deeper. Building a unique or relatively unpopular house is likely going to limit the population of potential buyers. It is both unlikely and risky to try to build a house that will command a premium price in the future from actual homebuyers, if you have no special expertise in that area.</p> <p>Regards, Don</p> <p>BTW -- The comment preview displays as black text on dark green, completely unreadable.<br /> </p> The question arises as to just who the investor expects to be selling to. If it is another future investor, then choosing the most popular style represents a lower risk because the market being sold into will be deeper. Building a unique or relatively unpopular house is likely going to limit the population of potential buyers. It is both unlikely and risky to try to build a house that will command a premium price in the future from actual homebuyers, if you have no special expertise in that area.

Regards, Don

BTW — The comment preview displays as black text on dark green, completely unreadable.

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