The truth is, because of the network effect, the most efficient economy of scale for a social media service is a monopoly. If you breakup Facebook into 10 mini Facebooks eventually one will win out again.
Indirect opportunity costs but the value of individual data is a perspective one. Before Google and Facebook how much did I earn from my personal data. Zero. So my personal data has zero value
If I'm the only person in my neighborhood that my neighbors choose to pay to mow their lawn what right does anyone have to step in between my customers and I?
Bro you don’t get it, Luigi has a paper that said 38%. It’s not like he will use government force to bring about completely arbitrary outcomes, it’s more that he will benevolently introduce your customers to desperately needed market forces, or else.
Tyler keeps saying, the price is zero so they cant be monopolies. The fact that Tyler sees the people's data = 0, is quite shocking. I thought he's an economist!
@Elias Håkansson Well, not according to Luigi. The customer gives up data to Google. Google then sells the data to other companies/institutions and due to the monopoly (assuming there is one) they can set the price as they wish. This is an extra cost to those companies that they need to compensate. They do this by increasing the prices of their services, which is paid by the customer. So while there may not be a cost in giving up data to a given company, there is an indirect cost to giving up the data to a monopoly.
@Elias Håkansson If third parties turn to Facebook because they are the cheapest, no problem. If, however, they turn to Facebook because Facebook is the only company that are able to provide the product in demand (data) due to their position in the market, then there is a problem and this problem is likely to present as a cost to consumers.
@Elias Håkansson You present my point better than I did myself. Thanks! Of course, the point relies on whether or not Facebook is in fact a monopoly. If they are not, they are probably unable to charge more for their products than what they are worth. I am not sure if Facebook is a monopoly, but I think we need to be aware and pay attention that they don't become one. I agree that Facebook has made a great product and should 'reap the rewards'. And of course every business should strive to become a monopoly. I am, however, of the very strong opinion that a company should maintain their monopolies by continuously delivering the best service and not by using their market position to eliminate competition. In your analogy, Jeff Bezos should be allowed to buy all other e-commerce companies, as it would set a negative precedent if he isn't. I strongly disagree. You argue, that there is in fact competition. I agree to some extent. It is, however, VERY limited. To stay within the automobile universe, I would say that I am happy to be able to pick between dozens of manufacturers when buying a car today. When buying a phone (i.e. an OS), I basically only have a choice between Google, Apple and Microsoft.
@Elias Håkansson Well I am an unknown economist and his claim that Google and Facebook are not monopolies coz you can advertise on radio and TV and print is bullshit and pure propaganda. There are literally NO browser or social media channels where you can say: oh, i've made this cool search ad campaign, gonna send out a few inqueries to competitive channels.... can't - coz they don't exist lol.Therefore it's not about my idea or opinion, it's a fact. And he also said they were great - now that's lobbying. Ask him to prove it? They are not great, they are imperfect exactly because they are monopolies.
They are a monopoly....that has an 85% market share and numerous competitors and alternatives.... 😑 okay then. I guess this isn't the place to learn economics because I don't think many of you guys, including some in the video, understand what monopolies actually are because you're confusing it with successful business that most people choose to use or government interference in the market "picking winners and losers". Government, btw, IS an example of an actual monopoly, not google or standard oil.
People keep missing the basic critique. If you don't want to "pay" for google in terms of giving up your data, then you don't have to use it. There are alternative search engines and social media sites. How is that a monopoly?
I think the issue is that, with Google for example, I love that it can give me personalized search results because I've used it for so long. Switching to another site isn't easy because I pay this "cost" (that is losing this personalized benefit) from switching. Switching costs force a market towards monopoly. Similarly, Facebook has a switching cost that is I lose touch with all my friends on Facebook. What Luigi here calls "social graph portability", is non existent. Again, a switching cost.
@@hariharanjayashankar8932 you are still making a voluntary transaction. No one would claim a company you work for has monopolistic wage setting on you because switching jobs is expensive in lots of non monetary ways. What you have listed is just a part of non monetary compensation, not some inherent failure in markets
@@ajitkirpekar4251 good point. And yes it's all a voluntary transaction so people are likely using this stuff because they get a lot of welfare increases from doing so. I'll just add that imperfect switching between jobs or sectors actually is a fairly dominant explanation now of labour market monopsony (that is firms having too much power in wage setting). Which is why minimum wage increases doesn't seem to have obvious empirical downsides for now. But I guess that's an entirely different topic
@@hariharanjayashankar8932 It is a cause offered up, but hard to measure. Even still, MW is not a free lunch and someone bears the cost. Evidence suggests employers scale back on hrs/innovate to labor saving alternatives.
@@hariharanjayashankar8932 also, if the problem is switching costs, we should be pushing for contract labor, no healthcare benefits nor other non monetary benefits. We seem to be heading in the opposite direction policy wise
Non solo. Ho visto certe interviste alla BBC con personaggi che andavano fuori dai binari del "Politicamente corretto" interrotti puntualmente dall'intervistatore/intervistatrice.... Una cosa insopportabile.
Bravo Luigi as usual.
The truth is, because of the network effect, the most efficient economy of scale for a social media service is a monopoly. If you breakup Facebook into 10 mini Facebooks eventually one will win out again.
Indirect opportunity costs but the value of individual data is a perspective one. Before Google and Facebook how much did I earn from my personal data. Zero. So my personal data has zero value
If I'm the only person in my neighborhood that my neighbors choose to pay to mow their lawn what right does anyone have to step in between my customers and I?
Bro you don’t get it, Luigi has a paper that said 38%. It’s not like he will use government force to bring about completely arbitrary outcomes, it’s more that he will benevolently introduce your customers to desperately needed market forces, or else.
@@YShiishening
Lol, wut?
Tyler keeps saying, the price is zero so they cant be monopolies.
The fact that Tyler sees the people's data = 0, is quite shocking. I thought he's an economist!
He is a capitalist, aka. brainwashed economist.
@Elias Håkansson Well, not according to Luigi. The customer gives up data to Google. Google then sells the data to other companies/institutions and due to the monopoly (assuming there is one) they can set the price as they wish. This is an extra cost to those companies that they need to compensate. They do this by increasing the prices of their services, which is paid by the customer.
So while there may not be a cost in giving up data to a given company, there is an indirect cost to giving up the data to a monopoly.
@Elias Håkansson
If third parties turn to Facebook because they are the cheapest, no problem. If, however, they turn to Facebook because Facebook is the only company that are able to provide the product in demand (data) due to their position in the market, then there is a problem and this problem is likely to present as a cost to consumers.
@Elias Håkansson You present my point better than I did myself. Thanks! Of course, the point relies on whether or not Facebook is in fact a monopoly. If they are not, they are probably unable to charge more for their products than what they are worth. I am not sure if Facebook is a monopoly, but I think we need to be aware and pay attention that they don't become one.
I agree that Facebook has made a great product and should 'reap the rewards'. And of course every business should strive to become a monopoly. I am, however, of the very strong opinion that a company should maintain their monopolies by continuously delivering the best service and not by using their market position to eliminate competition.
In your analogy, Jeff Bezos should be allowed to buy all other e-commerce companies, as it would set a negative precedent if he isn't. I strongly disagree.
You argue, that there is in fact competition. I agree to some extent. It is, however, VERY limited. To stay within the automobile universe, I would say that I am happy to be able to pick between dozens of manufacturers when buying a car today. When buying a phone (i.e. an OS), I basically only have a choice between Google, Apple and Microsoft.
Google and face book are monopolies
liked this after the 5min ! really good debate
Great debate & thanks. Though in the second half of the video, I find the debate lacking a proper intervention from the host.
Oh my god this guy on the left... who pays him? I mean he is doing a great so called lobbying job :D
@Elias Håkansson Well I am an unknown economist and his claim that Google and Facebook are not monopolies coz you can advertise on radio and TV and print is bullshit and pure propaganda. There are literally NO browser or social media channels where you can say: oh, i've made this cool search ad campaign, gonna send out a few inqueries to competitive channels.... can't - coz they don't exist lol.Therefore it's not about my idea or opinion, it's a fact. And he also said they were great - now that's lobbying. Ask him to prove it? They are not great, they are imperfect exactly because they are monopolies.
They are a monopoly....that has an 85% market share and numerous competitors and alternatives.... 😑 okay then.
I guess this isn't the place to learn economics because I don't think many of you guys, including some in the video, understand what monopolies actually are because you're confusing it with successful business that most people choose to use or government interference in the market "picking winners and losers".
Government, btw, IS an example of an actual monopoly, not google or standard oil.
People keep missing the basic critique. If you don't want to "pay" for google in terms of giving up your data, then you don't have to use it. There are alternative search engines and social media sites. How is that a monopoly?
I think the issue is that, with Google for example, I love that it can give me personalized search results because I've used it for so long. Switching to another site isn't easy because I pay this "cost" (that is losing this personalized benefit) from switching.
Switching costs force a market towards monopoly.
Similarly, Facebook has a switching cost that is I lose touch with all my friends on Facebook. What Luigi here calls "social graph portability", is non existent.
Again, a switching cost.
@@hariharanjayashankar8932 you are still making a voluntary transaction. No one would claim a company you work for has monopolistic wage setting on you because switching jobs is expensive in lots of non monetary ways.
What you have listed is just a part of non monetary compensation, not some inherent failure in markets
@@ajitkirpekar4251 good point. And yes it's all a voluntary transaction so people are likely using this stuff because they get a lot of welfare increases from doing so.
I'll just add that imperfect switching between jobs or sectors actually is a fairly dominant explanation now of labour market monopsony (that is firms having too much power in wage setting). Which is why minimum wage increases doesn't seem to have obvious empirical downsides for now. But I guess that's an entirely different topic
@@hariharanjayashankar8932 It is a cause offered up, but hard to measure. Even still, MW is not a free lunch and someone bears the cost. Evidence suggests employers scale back on hrs/innovate to labor saving alternatives.
@@hariharanjayashankar8932 also, if the problem is switching costs, we should be pushing for contract labor, no healthcare benefits nor other non monetary benefits. We seem to be heading in the opposite direction policy wise
Cowen's style of interrupting fair conversation reminded me some worst Italian tv programs.
Non solo. Ho visto certe interviste alla BBC con personaggi che andavano fuori dai binari del "Politicamente corretto" interrotti puntualmente dall'intervistatore/intervistatrice.... Una cosa insopportabile.