Difference between revisions of "Artificial scarcity"
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== Responses to artificial scarcity == | == Responses to artificial scarcity == | ||
In the absence of artificial scarcity, businesses and individuals would create tools based on their own need (demand). For example, if a business had a strong need for a voice recognition program, they would pay to have the program developed to suit their needs. The business would profit not on the program, but on the resulting boost in efficiency caused by the program. The subsequent abundance of the program would lower operating costs for the developer as well as other businesses using the new program. Lower costs for businesses result in lower prices in the competitive free market. Lower prices from suppliers would also raise profits for the original developer. In abundance, businesses would continue to pay to improve the program to best suit their own needs, and increase profits. Over time, the original business makes a return on investment, and the final consumer has access to a program that suits their needs better than any one program developer can predict. This is the common rationale behind [[open-source]] software, such as [[Mozilla Firefox]]. | In the absence of artificial scarcity, businesses and individuals would create tools based on their own need (demand). For example, if a business had a strong need for a voice recognition program, they would pay to have the program developed to suit their needs. The business would profit not on the program, but on the resulting boost in efficiency caused by the program. The subsequent abundance of the program would lower operating costs for the developer as well as other businesses using the new program. Lower costs for businesses result in lower prices in the competitive free market. Lower prices from suppliers would also raise profits for the original developer. In abundance, businesses would continue to pay to improve the program to best suit their own needs, and increase profits. Over time, the original business makes a return on investment, and the final consumer has access to a program that suits their needs better than any one program developer can predict. This is the common rationale behind [[open-source]] software, such as [[Mozilla Firefox]]. | ||
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| + | However, the above is completely incoherent, and incorrect. Mozilla actually makes an overwhelming majority of its operating cashflow through a partnership with [[Google]], to the tune of tens of millions of dollars for featuring its search bar on default to using Google. | ||
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| + | source: http://techcrunch.com/2008/08/28/mozilla-extends-lucrative-deal-with-google-for-3-years/ | ||
== See also == | == See also == | ||