| Last Cereal: Message Board: posting |
| re: what is it |
| [9022] by "proxy thing" (pool-138-88-117-244.res.east.ver) on Fri 01 Feb 2002 10:09:02 [ reply ] |
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No, you didn't say quality up != cost up, but it needed mentioning because we can't just talk about quality itself being good or bad--of course it's good, but there is a reason why it, like everything else good, is scarce.
Economists don't use any algorithms. They just make observe and measurements. Businessmen with their linear optimization all over the place probably make all sorts of assumptions. It's not clear whether economists and businessmen make assumptions based on the tools at their disposal, or choose tools at their disposal based on their assumptions, but my guess is the former. They need to make assumptions or they can't take any action blessed by the theory gods. You can use multi ANOVA, but it's much more time consuming (time = money) and you'll have less warm fuzzy statistical signifigance when you're finished. It's really easy for a business to change price levels, but changing the quality of your products for the sake of an experiment overnight is basically impossible. To let consumers know that the quality is different, the firm would have to employ several different brand names, each at a different quality level. And this assumes that a firm is actually capable of changing their quality level, which may not be the case for any entity large enough to carry out such a grand experiment. |