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The Access Economy: Why the Normal Distribution Is Vanishing (2015)

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Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#21

Post by bluetomcat »

SmooL wrote: post #4

"-Normal distributions come from multifactorial situations, where many variables matter. -In a world governed by scarcity, our decisions and preferences tend to be multifactorial in nature. -In a world governed by abundance, on the other hand, our decisions are no longer multifactorial. They tend to be dominated by one factor above all others: either X matters to you, or it doesn’t." I'm more curious as to _why_ our…

> I'm more curious as to _why_ our decisions become dominated by one factor as we approach abundance.

I would speculate that it comes down to the availability of too many different "classes" of products and services, which are often self-exclusive. There is only so much time in a day to consume a limited amount of these products and services. People's time and attention span is the limiting factor.

Let's say that you are in the market for entertaining yourself in some way. You can entertain yourself by riding on a rollercoaster, by watching movies, by driving a sportscar, by hiking, by doing photography. There is too much choice, and you eventually pick only one or two of these activities and they eventually become your "favourites". You become addicted, you prefer buying only high-end, specialised equipment, and you skew the market of that product accordingly.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#22

Post by mrob »

in_cahoots wrote: post #17

The author almost stumbles on the answer to his question when he shows the height distribution. It’s bimodal, because men and women have different average heights. Similarly, flagship and lower-tier phone buyers will display distributions in what they’re willing to pay. If you combine two separate normal distributions you can always make a claim that a single distribution is no longer normal. But that doesn’t make it…

It's not similar to height distribution. At the population statistics level, human height is bimodal because humans either have a Y chromosome or they don't. What is the equivalent binary variable for the phone market?

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#23

Post by JMTQp8lwXL »

If this author's conjectures are correct (and I think there's some truth to them), my honest response is not care about anything. Because I'm not willing to be price gouged. If I know that something priced at the top end for the sake of it, I won't pay. I don't need to care about Taylor Swift that much. I don't need the latest smartphone.

This doesn't work with everything; for example, I could need access to health care. But for the vast majority of non life-or-death purchases, I'll opt-out.

I don't think I agree with the rationale: the bifurcation is more likely based in economics. Niche appeal at 10x the cost might be more profitable that reasonably priced, mass appeal products. E.g., when it comes to things like Taylor Swift tickets. I'm unwilling to spend a few hundred dollars to see her. These live performances are for people who are.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#24

Post by hn_throwaway_99 »

polote wrote: post #2

> Chances are good that if you’re in the market for a smartphone, you fall into one of two very clear cut categories. Either: a. you’ve decided that your new phone is a very important item in your life, so you’re going to buy the nicest phone available at whatever price. (Usually this means an iPhone, although some flagship Android phones qualify for this category.) Or, b. you’ve decided that just about every phone o…

And, indeed, Apple's pricing strategy (selling old phones on discount, having multiple versions of the flagship, e.g. "Max" and other) suggests they're trying to hit a broad section of the demand curve.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#25

Post by [deleted] »

mrob wrote: post #22
in_cahoots wrote: post #17

The author almost stumbles on the answer to his question when he shows the height distribution. It’s bimodal, because men and women have different average heights. Similarly, flagship and lower-tier phone buyers will display distributions in what they’re willing to pay. If you combine two separate normal distributions you can always make a claim that a single distribution is no longer normal. But that doesn’t make it…

It's not similar to height distribution. At the population statistics level, human height is bimodal because humans either have a Y chromosome or they don't. What is the equivalent binary variable for the phone market?

[deleted]

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#26

Post by coldtea »

>We can see, too, that these bifurcations are driven by a shift from a world of scarcity to a world of abundance.

To me all these bifurcations seem to me to stem from a change of a world of more evenly distributed wealth (for working, lower middle, and middle class) and one with wild inequality.

It's a world where a 10-20% can afford the "whatever" (e.g. best phone, live in NY/Bay area, university degree, etc) and the rest have to scrap by and increasingly pinch pennies (while still doing some desperate wealth-signalling purchases, like poor urban blacks that buy $200 sneakers to feel like they have something nice and can participate in the kind of society they see in ads).

Back in the 50s and up to the 80s a signle-income middle class household could still send a kid to college, buy a house, and so on. And living in NY or the Bay are was still very affordable (to the point that both areas had large artistic / bohemian communities living there, and not of the latte sipping urban wealth variety, but the penny pinching / stick it to the man / junky variety).

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#27

Post by coldtea »

bko wrote: post #5
polote wrote: post #2

> Chances are good that if you’re in the market for a smartphone, you fall into one of two very clear cut categories. Either: a. you’ve decided that your new phone is a very important item in your life, so you’re going to buy the nicest phone available at whatever price. (Usually this means an iPhone, although some flagship Android phones qualify for this category.) Or, b. you’ve decided that just about every phone o…

I don't think it is true. Just a cursory google search suggests that the market, at least globally, is a lot flatter and is likely flattening. Not everyone has an iPhone or Samsung. [0] Similarly, those large cities he lists (LA, New York and San Fran) have relatively low population growth, at 0.67%, 0.25% and 1% respectively [1]. Large cities like Phoenix, and Austin have around 2% growth. This makes more sense to m…

>I don't think it is true. Just a cursory google search suggests that the market, at least globally, is a lot flatter and is likely flattening. Not everyone has an iPhone or Samsung.

He doesn't say that "everyone has an iPhone or Samsung". Quite the opposite. That there's a large flat base of sub-300 phones, and a 10% (or more, depending on country) of people with high end (say over $800 phones), and not much in between.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#28

Post by coldtea »

Barrin92 wrote: post #14
bko wrote: post #5

Earlier quoted context omitted.

I don't think it is true. Just a cursory google search suggests that the market, at least globally, is a lot flatter and is likely flattening. Not everyone has an iPhone or Samsung. [0] Similarly, those large cities he lists (LA, New York and San Fran) have relatively low population growth, at 0.67%, 0.25% and 1% respectively [1]. Large cities like Phoenix, and Austin have around 2% growth. This makes more sense to m…

Yes, it's just a wrong intuition sold as fact. Millenials have increasingly started to buy larger cars and moved from the big cities to the sunbelt and the suburbs. ( https://www.theatlantic.com/business/archive/2017/04/why-is-... ) The idea that everyone will be riding around in shared cars and live in the LA megalopolis is a tech industry fantasy.

>The idea that everyone will be riding around in shared cars and live in the LA megalopolis is a tech industry fantasy.

It's also nowhere near anything TFA says.

What he says is that where people want to live is not very gaussianly (normal) distributed, but there is a peak for major urban centers (LA, NY, SF), and a large plateau of smaller places.

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#29

Post by coldtea »

JackFr wrote: post #15

This is pretty muddled thinking. He talks about categorical variables and then points out that they are not normally distributed. Which doesn’t make sense. (It almost could, but he skips an important step.) Apart from that it's mostly handwaving and opinion with no actual data. When you don't use data it's unsurprising that your personal experience matches your hypothesis.

>He talks about categorical variables and then points out that they are not normally distributed.

Smartphone prices and city populations are not categorical variables...

Re: The Access Economy: Why the Normal Distribution Is Vanishing (2015)

#30

Post by Jonanin »

coldtea wrote: post #26

> We can see, too, that these bifurcations are driven by a shift from a world of scarcity to a world of abundance. To me all these bifurcations seem to me to stem from a change of a world of more evenly distributed wealth (for working, lower middle, and middle class) and one with wild inequality. It's a world where a 10-20% can afford the "whatever" (e.g. best phone, live in NY/Bay area, university degree, etc) and t…

500 years ago, only 1-2% could afford "whatever" and the rest had to scrap by and pinch pennies. I'm not sure we're moving to a world of less evenly distributed wealth.
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