Make product worse, get money
a day ago
- #market-theory
- #economics
- #consumer-behavior
- Dating apps may have an incentive to string users along rather than help them find long-term relationships to keep them paying.
- Similar theories apply to other industries, like pizza restaurants making cheaper pizzas or automakers producing less safe cars to cut costs.
- Two general patterns emerge: 'Make product worse, get money' and 'Raise price, get money'.
- Markets reach equilibrium where competition prevents extreme cost-cutting or price hikes.
- Four reasons why products or services might be bad:
- 1. Consumers prefer cheaper, lower-quality options (e.g., cramped airline seats).
- 2. Information asymmetries prevent consumers from distinguishing good from bad (e.g., longevity scams).
- 3. Consumers have bad taste or preferences (e.g., low-quality restaurants in certain cities).
- 4. Companies with pricing power (e.g., monopolies) exploit their position without fear of competition.
- Dating apps' ability to maintain poor service suggests either market failure or consumer indifference.