23536
Bluelight Crew
Ever since I started moonlighting in the Breaking Bad TV Club, people have been asking me: Does it really make sense that Walter White has positioned himself as some kind of high-end meth manufacturer? Won’t desperate junkies just settle for anything? There’s no doubt showrunner Vince Gilligan has cut some logical corners to make compelling television, but Moneybox’s view is that it’s not on the economics side. If anything is shady about the idea of premium meth, it’s the chemistry.
The basic shape of the problem is illustrated by a late-August story out of San Francisco. A man in his early 50s bought some meth on Sixth St., sampled the product, and decided the quality didn’t pass muster. He chose to confront his supplier about it, much as one might complain about the purchase of any kind of good or service that didn’t meet reasonable quality standards. The problem, as it turns out, is that meth is a bit of an unusual product in that it’s typically sold by violent criminals. Complaining to the dealer didn’t reap a refund; it got the complainer tased, stabbed, and—adding insult to injury—mocked in local blogs for his misfortunes.
Part of what we learn here is that meth addicts are people just like you and me. They want a quality product, and they’re disappointed if they don’t get it.
So in a basic sense there’s no reason that better meth couldn’t get you a market advantage. The problem is that it’s hard to be credible while running an ongoing criminal conspiracy. Even if meth fans prefer good meth to bad, they may not be able to find it—and when disappointed, they have little recourse. That’s a problem for addicts, but also for the rest of us. Information about quality turns out to be a serious challenge for the organization of large-scale markets. The simplest economic models deal with this by stipulating that the market under consideration features “perfect information”—both buyers and sellers know everything there is to know about product quality.
In the real world, obviously, this is rarely going to be the case. And sometimes that leads to big trouble.
continued http://www.slate.com/articles/busin...icts_really_pay_more_for_higher_quality_.html
The basic shape of the problem is illustrated by a late-August story out of San Francisco. A man in his early 50s bought some meth on Sixth St., sampled the product, and decided the quality didn’t pass muster. He chose to confront his supplier about it, much as one might complain about the purchase of any kind of good or service that didn’t meet reasonable quality standards. The problem, as it turns out, is that meth is a bit of an unusual product in that it’s typically sold by violent criminals. Complaining to the dealer didn’t reap a refund; it got the complainer tased, stabbed, and—adding insult to injury—mocked in local blogs for his misfortunes.
Part of what we learn here is that meth addicts are people just like you and me. They want a quality product, and they’re disappointed if they don’t get it.
So in a basic sense there’s no reason that better meth couldn’t get you a market advantage. The problem is that it’s hard to be credible while running an ongoing criminal conspiracy. Even if meth fans prefer good meth to bad, they may not be able to find it—and when disappointed, they have little recourse. That’s a problem for addicts, but also for the rest of us. Information about quality turns out to be a serious challenge for the organization of large-scale markets. The simplest economic models deal with this by stipulating that the market under consideration features “perfect information”—both buyers and sellers know everything there is to know about product quality.
In the real world, obviously, this is rarely going to be the case. And sometimes that leads to big trouble.
continued http://www.slate.com/articles/busin...icts_really_pay_more_for_higher_quality_.html
