Print

Please login or register.
1 Hour 1 Day 1 Week 1 Month Forever
Login with username, password and session length

[ehunt]

Right. A good point somehow got sidetracked into a semantic debate about the word monopoly. That is not the point. The point is:

We can imagine a world where there are various implementations of Dominion, which differ in quality and price.

In that world, we expect higher quality, and lower prices, than a world in which only one online implementation of Dominion is legally allowed to exist. This has nothing to do with Dominion or Goko, but is just economics.

We don't live in that hypothetical world, in this case because of government interference in the market (i.e. because of intellectual property laws) artificially creating a market in which only one company competes. As a result, a lot of consumer surplus is lost and a comparatively smaller producer surplus is gained. This again has nothing to do with Dominion or with Goko, but is just economics.

Theoretically government intervention in the market in the form of intellectual property protection is justified because there is a positive externality: future game designers are more likely to design good games knowing that they won't get free or cheap imitators ripping them off. This principle can be debated, but at least on a small scale or for more expensive products (pharmaceutical research) there's empirical evidence for it. But I don't know any economic theory that says it's good for one particular product that only one company be legally allowed to sell it.

[WanderingWinder]

Right. A good point somehow got sidetracked into a semantic debate about the word monopoly. That is not the point. The point is:

We can imagine a world where there are various implementations of Dominion, which differ in quality and price.

In that world, we expect higher quality, and lower prices, than a world in which only one online implementation of Dominion is legally allowed to exist. This has nothing to do with Dominion or Goko, but is just economics.

We don't live in that hypothetical world, in this case because of government interference in the market (i.e. because of intellectual property laws) artificially creating a market in which only one company competes. As a result, a lot of consumer surplus is lost and a comparatively smaller producer surplus is gained. This again has nothing to do with Dominion or with Goko, but is just economics.

Theoretically government intervention in the market in the form of intellectual property protection is justified because there is a positive externality: future game designers are more likely to design good games knowing that they won't get free or cheap imitators ripping them off. This principle can be debated, but at least on a small scale or for more expensive products (pharmaceutical research) there's empirical evidence for it. But I don't know any economic theory that says it's good for one particular product that only one company be legally allowed to sell it.

You're definitely going RSP here.

[Mic Qsenoch]

Right. A good point somehow got sidetracked into a semantic debate about the word monopoly. That is not the point. The point is:

We can imagine a world where there are various implementations of Dominion, which differ in quality and price.

In that world, we expect higher quality, and lower prices, than a world in which only one online implementation of Dominion is legally allowed to exist. This has nothing to do with Dominion or Goko, but is just economics.

We don't live in that hypothetical world, in this case because of government interference in the market (i.e. because of intellectual property laws) artificially creating a market in which only one company competes. As a result, a lot of consumer surplus is lost and a comparatively smaller producer surplus is gained. This again has nothing to do with Dominion or with Goko, but is just economics.

Theoretically government intervention in the market in the form of intellectual property protection is justified because there is a positive externality: future game designers are more likely to design good games knowing that they won't get free or cheap imitators ripping them off. This principle can be debated, but at least on a small scale or for more expensive products (pharmaceutical research) there's empirical evidence for it. But I don't know any economic theory that says it's good for one particular product that only one company be legally allowed to sell it.

You're definitely going RSP here.

Yeah, I also thought that post was pretty sexy.

[spiritbears]

Right. A good point somehow got sidetracked into a semantic debate about the word monopoly. That is not the point. The point is:

We can imagine a world where there are various implementations of Dominion, which differ in quality and price.

In that world, we expect higher quality, and lower prices, than a world in which only one online implementation of Dominion is legally allowed to exist. This has nothing to do with Dominion or Goko, but is just economics.

We don't live in that hypothetical world, in this case because of government interference in the market (i.e. because of intellectual property laws) artificially creating a market in which only one company competes. As a result, a lot of consumer surplus is lost and a comparatively smaller producer surplus is gained. This again has nothing to do with Dominion or with Goko, but is just economics.

Theoretically government intervention in the market in the form of intellectual property protection is justified because there is a positive externality: future game designers are more likely to design good games knowing that they won't get free or cheap imitators ripping them off. This principle can be debated, but at least on a small scale or for more expensive products (pharmaceutical research) there's empirical evidence for it. But I don't know any economic theory that says it's good for one particular product that only one company be legally allowed to sell it.

Thank you!  This is exactly the argument I've been trying to make.

[Kirian]

Right. A good point somehow got sidetracked into a semantic debate about the word monopoly. That is not the point. The point is:

We can imagine a world where there are various implementations of Dominion, which differ in quality and price.

In that world, we expect higher quality, and lower prices, than a world in which only one online implementation of Dominion is legally allowed to exist. This has nothing to do with Dominion or Goko, but is just economics.

We don't live in that hypothetical world, in this case because of government interference in the market (i.e. because of intellectual property laws) artificially creating a market in which only one company competes. As a result, a lot of consumer surplus is lost and a comparatively smaller producer surplus is gained. This again has nothing to do with Dominion or with Goko, but is just economics.

Theoretically government intervention in the market in the form of intellectual property protection is justified because there is a positive externality: future game designers are more likely to design good games knowing that they won't get free or cheap imitators ripping them off. This principle can be debated, but at least on a small scale or for more expensive products (pharmaceutical research) there's empirical evidence for it. But I don't know any economic theory that says it's good for one particular product that only one company be legally allowed to sell it.

You're definitely going RSP here.

I disagree.  He's indicating that there are multiple positions that can be justified--and often are justified differently depending on which political side you're on--but without indicating a side in his post.  Not RSP material quite yet.

[spiritbears]

What is RSP?

[michaeljb]

Religion, Sex, Politics

[ftl]

I think moving "Goko Sucks" threads to RSP at this point is quite reasonable.

[ashersky]

I think moving "Goko Sucks" threads to RSP at this point is quite reasonable.

How about "Goko Rocks" threads?

[Kuildeous]

I think moving "Goko Sucks" threads to RSP at this point is quite reasonable.

How about "Goko Rocks" threads?

Well, hypothetical posts don't really count.

[WanderingWinder]

Right. A good point somehow got sidetracked into a semantic debate about the word monopoly. That is not the point. The point is:

We can imagine a world where there are various implementations of Dominion, which differ in quality and price.

In that world, we expect higher quality, and lower prices, than a world in which only one online implementation of Dominion is legally allowed to exist. This has nothing to do with Dominion or Goko, but is just economics.

We don't live in that hypothetical world, in this case because of government interference in the market (i.e. because of intellectual property laws) artificially creating a market in which only one company competes. As a result, a lot of consumer surplus is lost and a comparatively smaller producer surplus is gained. This again has nothing to do with Dominion or with Goko, but is just economics.

Theoretically government intervention in the market in the form of intellectual property protection is justified because there is a positive externality: future game designers are more likely to design good games knowing that they won't get free or cheap imitators ripping them off. This principle can be debated, but at least on a small scale or for more expensive products (pharmaceutical research) there's empirical evidence for it. But I don't know any economic theory that says it's good for one particular product that only one company be legally allowed to sell it.

You're definitely going RSP here.

I disagree.  He's indicating that there are multiple positions that can be justified--and often are justified differently depending on which political side you're on--but without indicating a side in his post.  Not RSP material quite yet.

The reason I say this is because I was all about to write a response to the post, then realized that said response, while entirely dealing directly with what he was saying, would definitely be RSP. Particularly, he's saying "government interference in the market (i.e. because of intellectual property laws) artificially creating a market in which only one company competes. As a result, a lot of consumer surplus is lost and a comparatively smaller producer surplus is gained". But of course, this is pretty ridiculous. Sure, government is defining what is and is not property and who has rights to that - in the same way as it does for all kinds of property, which is what every market is based on. I mean, I would say that the government is equally interfering in the market by saying you have exclusive rights to the computing device you are using to access this site. And it's just as true. Now, we can disagree on whether you should have those rights or not, and in some cases probably agree yes, others probably agree no, unless one of us doesn't believe in private property of course... all of which is definitely a political issue.

Also, his final claim of "But I don't know any economic theory that says it's good for one particular product that only one company be legally allowed to sell it." is pretty ridiculous as well. I mean, it gets to how you want to define terms - economic theories, though, generally don't say "it's good for ______" where the blank is ANYTHING. They don't have values - you have to come into the picture with values, and then economics can help you get where you want to go with those values. And of course there are some value systems which say that this is a good thing, as that's the way it is, so SOMEONE supports it.

And he clearly is taking a side on the issue, even while saying 'potentially you could make the argument for the other side, but only via method X'. Which is also a bad bit of sophistry - sure, if we accept your premises, then the way you would make such an argument would be X. But clearly the people disagreeing with him on the position don't accept his premises! This is the point!

Now, none of this is to say those points or positions which he is making or supporting are wrong, only that the arguments he is using are bad ones. And moreover, political.

[theory]

Haha.  I also wrote up a long post but deleted it for exactly the same reason.

It's just very strange to associate Goko with monopolistic anti-competitive behavior.  It's not even close.  Scholastic Press had an exclusive license on publishing Harry Potter.  Maybe you're sad that they overpriced the book or used cheap binding, but that doesn't mean that the answer is for someone else to publish Harry Potter as well.  The market will correct: if the prices are too high or the product is too shabby, Scholastic and JK Rowling will suffer accordingly and appropriately.  Scholastic may have an exclusive license, but its incentives are correctly aligned with that of its consumers.  Ditto for Goko. 

So it's not about legalistic hair-splitting or semantic issues.  It's just not a situation where antitrust concepts are in play. 

[dondon151]

The market will correct: if the prices are too high or the product is too shabby, Scholastic and JK Rowling will suffer accordingly and appropriately.  Scholastic may have an exclusive license, but its incentives are correctly aligned with that of its consumers.  Ditto for Goko.

Of course! As long as people can play Dominion, then Goko doesn't have to do anything special. People just really want their Dominion fix. Who cares about leaderboards, lobbies, and loss-upon-quitting enough to not play Dominion?

[GendoIkari]

Haha.  I also wrote up a long post but deleted it for exactly the same reason.

It's just very strange to associate Goko with monopolistic anti-competitive behavior.  It's not even close.  Scholastic Press had an exclusive license on publishing Harry Potter.  Maybe you're sad that they overpriced the book or used cheap binding, but that doesn't mean that the answer is for someone else to publish Harry Potter as well.  The market will correct: if the prices are too high or the product is too shabby, Scholastic and JK Rowling will suffer accordingly and appropriately.  Scholastic may have an exclusive license, but its incentives are correctly aligned with that of its consumers.  Ditto for Goko. 

So it's not about legalistic hair-splitting or semantic issues.  It's just not a situation where antitrust concepts are in play.

Can you explain to someone completely ignorant of anti-trust concepts what makes Goko (or Scholastic Press) NOT an anti-trust / monopolistic situation? I mean, if the only way to read Harry Potter is to buy the Scholastic printed version of it, then isn't it the case that Scholastic will not suffer for overpricing the books or poor bookbinding nearly as much as they would if there were a second company also allowed to publish it?

[theory]

Antitrust has a sort of inherent tension with IP.  One stops monopolies and the other grants monopolies.

The core principle is that it is OK to earn supracompetitive profits as "a consequence of a superior product, business acumen, or historic accident".  It becomes a problem when there are no adequate substitutes, or alternatively, you take steps to ensure that there are no adequate substitutes.

The concept of "substitute" applied to HP essentially says, JK Rowling wants to maximize her sales.  If she signs an exclusive license with Scholastic, we can trust that she is bargaining for Scholastic to do as good a job as possible publishing her works.  Likewise, we can trust that Scholastic also wants to do as good a job as possible.  Sure, no matter how crappy their product is, they'll still have some consumers, but when they make a good product, they'll attract more consumers that are currently buying substitutes (Eragon?) instead.  So if Scholastic dramatically overprices HP, it is a net loss for them.

On the flip side, if there were no substitutes (let's say Rowling's contract with Scholastic also required it to stop publishing other teen fiction novels, and Scholastic dominates the teen fiction market), now the incentives are all wrong.  Now there is a lot less reason to worry about overpricing: your consumers are captive because they don't have anywhere else to go.  If Scholastic produces a superb product, they don't gain many more consumers than if they produced a shabby product. 

Now, of course, there are gradations.  Antitrust is nothing if not murky, and sometimes the ultimate verdict kind of comes down to a gutcheck. 

The disconnect might be how you define the relevant market.  The history of US antitrust works very hard to promote "interbrand" competition, rather than "intrabrand" competition.  Reason being, if you define each individual brand/product as its own relevant market (i.e., Harry Potter's market is Harry Potter books, not all books), then you run into some other problematic issues.  Is it OK if Pepsi agrees to sell only west of the Mississippi and Coke agrees only to sell east of the Mississippi?  Shouldn't it be an antitrust violation if DXV pays RGG/etc. not to make any other deckbuilders?  Neither of those would be prosecutable if each brand constituted its own relevant market, even though there might be compelling reasons to suggest that Coke and Pepsi are not "true" competitors, just like how Dominion and Ascension are not "true" competitors.

[Kirian]

Haha.  I also wrote up a long post but deleted it for exactly the same reason.

It's just very strange to associate Goko with monopolistic anti-competitive behavior.  It's not even close.  Scholastic Press had an exclusive license on publishing Harry Potter.  Maybe you're sad that they overpriced the book or used cheap binding, but that doesn't mean that the answer is for someone else to publish Harry Potter as well.  The market will correct: if the prices are too high or the product is too shabby, Scholastic and JK Rowling will suffer accordingly and appropriately.  Scholastic may have an exclusive license, but its incentives are correctly aligned with that of its consumers.  Ditto for Goko. 

So it's not about legalistic hair-splitting or semantic issues.  It's just not a situation where antitrust concepts are in play.

Can you explain to someone completely ignorant of anti-trust concepts what makes Goko (or Scholastic Press) NOT an anti-trust / monopolistic situation? I mean, if the only way to read Harry Potter is to buy the Scholastic printed version of it, then isn't it the case that Scholastic will not suffer for overpricing the books or poor bookbinding nearly as much as they would if there were a second company also allowed to publish it?

Harry Potter was in competition with thousands of other books; Dominion is in competition with hundreds of other games.

If RGG were the only publisher of all Eurogames, that would be monopolistic.

[GigaKnight]

Antitrust has a sort of inherent tension with IP.  One stops monopolies and the other grants monopolies.

The core principle is that it is OK to earn supracompetitive profits as "a consequence of a superior product, business acumen, or historic accident".  It becomes a problem when there are no adequate substitutes, or alternatively, you take steps to ensure that there are no adequate substitutes.

The concept of "substitute" applied to HP essentially says, JK Rowling wants to maximize her sales.  If she signs an exclusive license with Scholastic, we can trust that she is bargaining for Scholastic to do as good a job as possible publishing her works.  Likewise, we can trust that Scholastic also wants to do as good a job as possible.  Sure, no matter how crappy their product is, they'll still have some consumers, but when they make a good product, they'll attract more consumers that are currently buying substitutes (Eragon?) instead.  So if Scholastic dramatically overprices HP, it is a net loss for them.

On the flip side, if there were no substitutes (let's say Rowling's contract with Scholastic also required it to stop publishing other teen fiction novels, and Scholastic dominates the teen fiction market), now the incentives are all wrong.  Now there is a lot less reason to worry about overpricing: your consumers are captive because they don't have anywhere else to go.  If Scholastic produces a superb product, they don't gain many more consumers than if they produced a shabby product. 

Now, of course, there are gradations.  Antitrust is nothing if not murky, and sometimes the ultimate verdict kind of comes down to a gutcheck. 

The disconnect might be how you define the relevant market.  The history of US antitrust works very hard to promote "interbrand" competition, rather than "intrabrand" competition.  Reason being, if you define each individual brand/product as its own relevant market (i.e., Harry Potter's market is Harry Potter books, not all books), then you run into some other problematic issues.  Is it OK if Pepsi agrees to sell only west of the Mississippi and Coke agrees only to sell east of the Mississippi?  Shouldn't it be an antitrust violation if DXV pays RGG/etc. not to make any other deckbuilders?  Neither of those would be prosecutable if each brand constituted its own relevant market, even though there might be compelling reasons to suggest that Coke and Pepsi are not "true" competitors, just like how Dominion and Ascension are not "true" competitors.

This is all very interesting and you clearly know quite a bit more about the legal issues than I do, which makes sense, since I hear you're a lawyer.

But I thought the Harry Potter analogy seemed a bit flawed as a comparison to Dominion, specifically because it's a book.  I mean, if two publishers each made a hardcopy of a Harry Potter novel, there wouldn't be much to differentiate them.  The covers and maybe slight variations in font / weights / page counts, but those don't seem like they'd be that important.  Similarly, if two publishers could put out a Harry Potter ebook, realistically, they just wouldn't be that different.

It seems like the less differentiated versions of a product are, the less relevant competition is.  And electronic Dominion is certainly differentiated or we'd all be happy to buy/play it no matter who made it.

I guess I really don't have much of a point other than that this distinction seems relevant to me.  A competing electronic Dominion implementation could very much make Goko better.  A competing Harry Potter publisher doesn't seem very likely to change what Scholastic does.

[theory]

Book binding quality, introductions, annotations, and above all, price!  There's lots of ways to differentiate with publishers.

[ipofanes]

The seemingly oxymoronic concept of monopolistic competition actually exists. If Harry Potter books became too expensive, people would switch to reading Artemis Fowl. If the Goko implementation left something to be desired, people would switch to Isotropic Innovation. Even pharmaceuticals protected by patent law can be substituted by possibly less efficacious substances.   

[GigaKnight]

Book binding quality, introductions, annotations, and above all, price!  There's lots of ways to differentiate with publishers.

Well, I'm talking about ways to differentiate that truly impact consumer behavior.  I don't personally know anybody who has ever voiced a buying decision made on any of the things you mentioned (or even remarked on it in a review) except price.  But price is the one way the IP licensor DOESN'T want them to compete, because that directly cuts into overall profits.

Just going with this thought some more, I see incentive for an IP owner to say "anybody can make my thing, but they have to pay me at least X for it" because, if it's actually a viable business model, the competition means everybody gets better without cutting into the licensor's profit.  Now, as I touched on before, that kind of arrangement may not be attractive to developers.  But, in the case of Dominion, dougz did it for free, so that demonstrates *some* interest.    The hard part is getting the appropriate X value for any arbitrary implementation.

I guess it comes down the IP licensor's goal.  If absolute profit isn't the main goal, the multi-license idea could make sense (although the sky could be the limit with this approach).  If it's *guaranteed* money, exclusives start to look more attractive.  I don't particularly blame RGG for taking this approach, but I'd love to see what would happen in a multi-license environment (for any sufficiently-awesome game, really).

[yudantaiteki]

The seemingly oxymoronic concept of monopolistic competition actually exists. If Harry Potter books became too expensive, people would switch to reading Artemis Fowl. If the Goko implementation left something to be desired, people would switch to Isotropic Innovation.

That's obviously not true in practice, though.  The Goko implementation leaves a lot to be desired (for me), and I haven't stopped playing it or started playing some other free game.

And for HP, I started reading it when 4 books were out and I would have paid more than I did pay for the remaining books without question.  (Obviously there's a limit, I wouldn't have paid $75 for each book, but I certainly would have paid $35 instead of the $29.99 or whatever I did pay.)

[GendoIkari]

The seemingly oxymoronic concept of monopolistic competition actually exists. If Harry Potter books became too expensive, people would switch to reading Artemis Fowl. If the Goko implementation left something to be desired, people would switch to Isotropic Innovation.

That's obviously not true in practice, though.  The Goko implementation leaves a lot to be desired (for me), and I haven't stopped playing it or started playing some other free game.

Maybe you haven't, but I'm pretty sure lots of other people have... I mean, I play Goko from time to time when I really want a Dominion fix, but I won't pay money for it until certain things are addressed. I think there's lots of people who played on Isotropic who haven't bought Goko Dominion.

[ashersky]

The seemingly oxymoronic concept of monopolistic competition actually exists. If Harry Potter books became too expensive, people would switch to reading Artemis Fowl. If the Goko implementation left something to be desired, people would switch to Isotropic Innovation.

That's obviously not true in practice, though.  The Goko implementation leaves a lot to be desired (for me), and I haven't stopped playing it or started playing some other free game.

And for HP, I started reading it when 4 books were out and I would have paid more than I did pay for the remaining books without question.  (Obviously there's a limit, I wouldn't have paid $75 for each book, but I certainly would have paid $35 instead of the $29.99 or whatever I did pay.)

In this analogy, is Isotropic the public library that has its funding slashed by local government in order to raise their own salaries and is eventually forced to shut down because the bake sale permit wasn't approved?

[rspeer]

Maybe you haven't, but I'm pretty sure lots of other people have... I mean, I play Goko from time to time when I really want a Dominion fix, but I won't pay money for it until certain things are addressed. I think there's lots of people who played on Isotropic who haven't bought Goko Dominion.

*raises hand*

I gave Goko a lot of chances, but now I refuse to even log in to that piece of trash. I play Innovation on Isotropic for my card game fix, and I hope -- perhaps futilely -- that Goko will go under sooner rather than later and sell their Dominion license to someone who can make it fun.

I really do miss Dominion. But Isotropic is an interface that is fun to use repeatedly, and Goko is not, and that is much more significant to me than the difference between Dominion and Innovation.

[serakfalcon]

Quote from: ipofanes on April 20, 2013, 01:39:10 am

    The seemingly oxymoronic concept of monopolistic competition actually exists. If Harry Potter books became too expensive, people would switch to reading Artemis Fowl. If the Goko implementation left something to be desired, people would switch to Isotropic Innovation.

That's obviously not true in practice, though.  The Goko implementation leaves a lot to be desired (for me), and I haven't stopped playing it or started playing some other free game.

You can't make an argument from practice based on one person's experience.
Everything in life has a cost curve of people's willingness to pay. (in money or in time, waiting for a match with people who bought it)
It is a monopoly of sorts based on IP/branding but its in a market with many near substitutes. Its two competing forces. Were there multiple suppliers of Dominion, competition from the near substitutes and with eachother would almost certainly drive the price down. As-is Goko et. al. can set the price to whatever they want, and of course a subset of dominion fans will always be willing to buy it, the size of that subset depending on the price. Also, depending on how much you consider dominion substitutable for other games, you may be willing to pay more.
Its a major difference! Even if I don't really want to pay, but I think that there is no substitute for online dominion, I will behave as if it is a monopoly, however, if someone is neutral, they will treat it as if it was not a monopoly. So you get some sort of oligopolistic behavior going on.
I love Economics.