Grey Market

Kevin's argument is a classic example of the losing side of

prisoner's dilemma. As brief as it goes, if police aprehend two

suspects but need testimony from one to get at lease one conviction

for the suspected crime, the technique is to isolate both of them and

offer each the opportunity to go free in exchange for damaging

testimony versus their cohort. Thus each suspect is faced with a

choice; if both don't talk, both go free. If one talks and the other

doesn't, the one who attempted to work as a team goes to jail while

the one who attempted to thwart his cohort goes free. Invariably

both choose to talk.

This applies well to why cartels such as Opec rarely succeed in their

efforts to raise the price of the good that they could control with

cooperation.

If everyone elected to get less for their money and buy as locally as

possible on each purchase decision, there would be plenty more

(inefficient) jobs available to the populace. That much is certain.

But to think that this idea can perpetuate is foolish, and in due

time this will be realized by the Kevins of the world as well as all

middlemen distributors who seek to maintain their windfall profits

per unit.

Nonetheless, even I guilty of taking the loser's side of prisoner's

dilemma in an effort to be an idealist. I choose not to own a gun

nor knowingly maintain a friendship with anyone that does, vainly

hoping that if no one had a gun we'd all be safer in the process.

Nonetheless, if I'm shot I'm sure my dying thought will be that I'd

wished I'd had a gun just before my killer tried to shoot me.

Your last thoughts should be commands from your cerebral cortex to

your legs to run.

Jarrod

<p>

I don't know where you went to Law School. I do know that I went to

William Mitchell College of Law and graduated Cum Laude and I have

never heard of anything like the concoction you have dreamed up in my

10 years of practicing law. I think you have been watching too much

tv and reading too many radical books. One thing is for sure. If

your theories were true there would be no retail anymore. That might

be good for prices in the sense that there would be no middlemen to

mark them up. But without the efficiency of such a system we would

have chaos. Moreover, you misunderstand my points.

Once again, I do not say it is wrong to try and find the best price.

What I do say is that those who do not buy locally should not complain

about the disappearance of local services that have to close becasue

they are not supported locally. And by the same reasoning they

should not complain about losing their job to overseas competition if

the price of their labor is too high. I for one want to be able to

go down to my local camera store and look at things and be able to

buy things that I need right now. In order to do that the store has

to be there. In order for that store to be there it has to make a

profit. It is as simple as that. Kevin

And to Jonathan

<p>

When I was in undergraduate college I took 3 or 4 courses in macro

and microeconomics. One things I remember vividly is the theory of

the velocity of money. I do not know if that extra money would be

spent specifically on a hospital or a road or whatever, but I do know

that its velocity ( as the economists call it) would contribute

indirectly to all of those things and much more. Kevin

I didn't go to law school, Kevin. My degree was in geography, the

major in the United States that is the least declared by incoming

freshmen. This is due to the abundance of space here in the USA; in

other less space-endowed countries such as England(where it is the

fourth highest declared incoming major) geography has plenty of

respect.

<p>

My wife is a practicing attorney and a graduate of Emory University's

School of Law in Atlanta, Georgia. She works as a large firm's pro

bono specialist, and also will be attending a two-year fellowship for

the Mexican American Legal Defense Fund's charter office in Atlanta

come October.

<p>

I didn't dream up prisoner's dilemma, it was taught to me by a

respected geographer from the University of Florida named Grant

Thrall. Prisoner's dilemma is taught in many fields ranging from

geography to economics to sociology to law-including some classes at

Emory's School of Law. Plug the words "prisoner's dilemma theory"

into any search engine and be enlightened. It is a primary tenet of

cooperation theory worldwide, and frankly I'm suprised you've never

heard of it given your educational background.

<p>

In geography, prisoner's dilemma describes why cities without

political or geographical constraints suffer from vast urban sprawl

and horrible traffic. Consider Atlanta, a city I'm quite familiar

with. Atlanta has many municipalities at the fringe of their city

limits, and these municipalities are all too happy to give a new

housing permit to an individual that works in Atlanta and wishes to

live in their town. A prospective new citizen twenty years ago would

be faced with an easy choice; live in Atlanta and pay higher prices

affected by the value of land that those goods occupy, or buy a new

house in a subdivision just outside of Atlanta that has much lower

prices and more space in exchange for a relatively small sacrifice of

time. If you're the amongst the relative few to make this choice,

you benefit greatly from it. The problem is that many others will

also make the choice, and in the end your exchange of time for money

will become a disadvantage. The same distance takes three times as

long to travel at 4:30pm than it does at 4:30am.

<p>

This is not beneficial to Atlanta itself either, because it

negatively affects housing values as well as creates a large

population of individuals who earn their income in Atlanta but spend

their property taxes out of it. Invariably the end result is worse

traffic for everyone as the metropolitan statistical area becomes

less and less efficient with its space. Now Atlanta, through no

fault of their own, suffers from the worst traffic in the USA outside

of Southern California.

<p>

Examples of effective constraints to this end result are

a) the Vail valley in Colorado, where the geographical boundaries

on either side of the city are ardorous enough to discourage most

from commuting

b) Disneyworld in Orlando, who wisely purchased a much larger tract

of land than they'd need-knowing that at the fringe of that tract

would be poorly planned urban sprawl

c) European cities in general, who are extremely reluctant to give

new housing permits-which thus guarantees a compact city will stay

just that.

<p>

You're certainly correct that prisoner's dilemma is currently

changing the landscape of the retail industry forever. Quite

rapidly, people are being accustomed to the less visceral feeling of

online shopping in exchange for great availability and lower prices.

So all retail shops that sell items that don't need local

representation are as doomed as the station wagon was at the arrival

of the minivan in 1984. The end result of this will be that people's

expectations of localized service solutions will vanish. Then

competition will ensue amongst the sellers that can compete on price

to see who can provide the best service. This service costs money,

so in the end there will still be at least two alternatives for the

consumer: a firm based purely on price and a firm based on relatively

low prices and with excellent service. There have always been

customers loyal to both, and there always will be.

<p>

Germany effectively competes in the world market despite absurdly

high labor costs. They're able to do this by manufacturing goods

that depend more on unique traits rather than competing solely based

on price. This is the model for an effective transistion of American

labor-compete on other elements besides price and you will be

effective in surviving. Compete solely on price and you must face

the most desperate laborers head to head in a battle that will be

lost until your desperation matches theirs.

<p>

<i>But without the efficiency of such a system we would have

chaos.</i>

You and I have vastly different definitions of "efficiency".

<p>

<p>

Jarrod

<p>

After checking with a local economist concerning your last post, I am

told that if anywhere your theory could have evolved it would have

evolved in the United States already, and while it may evolve to a

degree, it will never be mainstream. Moreover, he tells me that

efficiancy and and cheapness in price do not necessarily coincide.

I like what some of the other folks have said. If there are people

in this country who are offering good deals, then buy from them. If

you live in a country other than the U.S and your local guy offers a

great deal, buy from them. Kevin

Kevin<p>Once again, prisoner's dilemma isn't <i>my</i> theory, but

rather a tried and true explanation to the actions of man done in the

singular which profoundly affect the collective. I don't know which

historical mind was the first to document this, but it wasn't

me.<P> As a geographer I look to the spatial aspect of nearly

everything, but I'm curious as to why it matters to you where the

theory originated. Do you wish to discredit it due to its origin?

<p><i>if anywhere your theory could have evolved it would have

evolved in the United States already, and while it may evolve to a

degree, it will never be mainstream</I>.<br> I completely disagree.

The way we buy a greeting card, for example, will not be changed by

more cost-efficient methods. Same goes for fresh fish, flowers,

gasoline or the other myriad of purchases that have great spatial

advantages or requirements. But in the world of urban development,

prisoner's dilemma is absolutely, positively the <b>mainstream</b>

model for the unchecked evolution of a metropolitan statistical

area. Instead of asking an economist, ask a geographer or urban

planner. I just picked Atlanta to make the point, as this is perhaps

the worst example of its impact.<p> In the last few years there has

been a cyclical change in housing values in the USA, with a decades-

long trend being reversed: People with high incomes are choosing to

once again locate within the primary city's limits, generally tearing

down an old small house and putting the largest possible house upon

this piece of land that the law allows. In geography it has been

termed "masionization," and it has occurred because the time

sacrifice of living in the bedroom communities has finally outweighed

the monetary savings.

"Once again, I do not say it is wrong to try and find the best price.

What I do say is that those who do not buy locally should not

complain about the disappearance of local services that have to close

becasue they are not supported locally."

<p>

"Locally" in our area i non-existant. Not because they were not

supported but because there is no market base large enough to support

a basic photo store, much less a specialized large format one.

<p>

Yes, the few dealers within a few hundred miles can get what I want.

They mail order it. If I have a question though, there are few in the

stores who can answer them as pertaining to much LF gear. They can

read the ad & sales info. So can I. They can then order it & we both

wait for it to come in. I can order it and cut out the middleman and

have it come directly to me rather than have another half day trip

just to pick up the item when it comes in. The guarantee is the

same... if it breaks I have to send it in for service. Same thing if

I buy 'locally', it still gets sent back for service & I am still out

the lens/whatever for the time it is getting serviced as the dealer I

just supported by paying a higher price doesn't have loaner gear to

cover LF needs.

Why buy esoteric gear locally when you don't get supported? It makes

no sense. As for patriotism & where you guy, what a load of bullshit.

I bet you believe Richard Nixon was set up also. Patriotism has

nothing to do with where you spend your money or where the product

was made. If some really think it does, what LF cameras, lenses &

film do you shoot? What tripod do you use? Where is your vehicle

made?

<p>

Buy where you will as long as the gear works. And if you can get out

of paying those damnable state taxes, more power to you.

I also find it safer to buy from well-known international retailers--be it RW, BH, Calumet, whoever--they know if they screw somebody via e-commerce, there's at least a middling chance this fact will be communicated to other customers. Witness a recent thread where a number of people swore off Heliopan and other HP Marketing products due to HP's petty behavior regarding resale of trademarked goods. Even ebay sellers have this constraint--if you screw up, some percentage of your potential customers find out.

But when the local photo store screws you, there's no effective way to communicate this fact to a meaningful percentage of their customers. I've had an immensely greater percentage of problem transactions with small local firms. Sorry, if you can't maintain the standard of service nor compete on price you deserve to close. Supporting inefficient economic entities just out of soft-heartedness or "patriotism" was a Soviet strategy. IT FAILED!

For niche products aimed at sophisticated consumers--certainly any camera bigger than 35mm--a zillion tiny local retailers will never again make more economic sense than a handful of national retailers. Some may struggle on for another 5 or 10 years, catering to older folks who aren't internet literate. But once that market's gone, they're dead as dinosaurs.