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Declare a User Revolution

This is an article about the dark side of (the economics of) innovation. Back in 2005 When i bought the phone sony ericson w300i I did everything in my power to choose wisely. Still, I'm stuck with a phone that i would have rather used for a projectile. Since then, i replaced that phone with an iphone?, which was equally frustrating for similar reasons.

As a consumer of electronic gadgets, we are all victims of a serious market failure: quality, usability, and sustainability are all being sacrificed on the altar of (new!) features. Unfortunately, its going to require a revolution to drive the marketers out of the design process. Fortunately, that revolution might be in progress.

Back to describing the problem. Here's the list of all the stuff i couldn't do with my W300i.

a) import contacts to my phone if i don't use outlook.

b) copy the voice recording i made with the phone to my computer and play it on my pc

c) plug in any normal headphones to this "walkman" phone.

d) plug in any normal USB cable to access the 1GB memory card.

e) download and play a new ringtone

f) Use the headphones at all because the wires were made to snap at the slightest tug, and the adpapter gadget was made to lose.

g) take pictures that aren't grainy.

All of these problems are readily solvable, but no market force currently exists that is strong enough to make Sony care, because they are benefiting from a market failure. Two failures more accurately, which are described by economists as the asymmetric information problem and the holdup problem.

Asymmetric Information: Companies are not ignorant of the fact that if they keep cranking out new products each year, they can keep the market in perpetual confusion - not allowing enough time for mass intelligence? to catch up on the comparative uselessness of their declared features. The economic solution for information asymmetry is either more time spent shopping or some kind of independent examiner. Since more time shopping by individuals is a collective waste of time, one might hope that consumer reports? or some other body might step up and fill the gap, but these get snared on deeper problems.
  • Its a tough business to get into: the advisory group needs a critical mass? of supporters who pay for advice to be able to afford to test products properly.
  • The signals from smart consumers get drowned out by "dumb money" which tends to follow marketing rather than advice.

Hold-ups In economics jargon a "holdup" is what happens when you buy something that gives the seller added power over you. Jargon aside it is not hard to label that feeling you get when buying a replacement battery or headphone or charger for your latest gadget as anything but a holdup. What do economists advise when a market is riddled with holdup problems? Merge.