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Ukv | 12 days ago
Unless I'm misunderstanding, shouldn't someone rational want to pay where (value - cost) is highest, opposed to increasing cost to the point where it equals value (which has diminishing returns)?
A $40 subscription creating $1000 worth of value would be preferred over a $200 subscription creating $1100 of value, for instance, and both preferred over a $1200 subscription creating $1200 of value.
concats|12 days ago
I was more so limiting myself to the simpler heuristic where people only pay roughly what they personally think something is worth, and not significantly more/less regardless of the options. But of course, as you've pointed out, in real life the options available really do matter, and someone might decline a 200:1200 trade if there are even more lopsided options available. It does complicate the though experiment somewhat if you try to take this into account.