69 Comments

Wait til your kids hear about the doctor! :)

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Many people think AI will make medical care cheaper. So far people mostly use it to make it more expensive.

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I have some personal experience here. Medicine is the archetypical industry for AI - it will/has made certain parts of it more.... effective and efficient... but because we (as a society) do not want cheaper medical care - and have established that we are not going to let AI do things we do not want - we are not going to let AI do that.

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I embrace your conclusion.

The human body is the synthesis of the insurable and the uninsurable.

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we are born pure of heart, free from pre-existing conditions - and it is at this moment, if we are to be saved, that we must take the sacrament of Coverage.

There is no thing, no one who is uninsurable - so long as you insure early enough.

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I had pre-existing conditions from before I was born. Any genetic test would have shown it, and in the absence of a test my parents could tell from their own genetics that I was likely to be a bad risk.

If there was an insurance product that could be bought before someone was born, and if insuring for medical risk 75 years out was even remotely possible, parents would practice adverse risk selection against the company selling such a policy.

If you have the government do it that solves the selection issue but leaves the typical government problems (everyone loves $0 deductibles paid for by someone else).

Anyway, the main issue is that healthcare is revenue for providers, so they always want to “provide” more healthcare. It matters not if it such care improves health, only that it can be billed. AI will (is today) used to find ways to bill more. An AI that billed less would not be employed by any provider.

In a contest between AIs I think the one that increases revenue will tend to run circles around one meant to control costs. There will be more money to pay people that design the former, and the people receiving the “healthcare” will be grateful so long as it’s billed to someone else.

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the solution is always "insure earlier." Perhaps Alabama can revise the law about when someone is allowed to receive Coverage instead.

"AI will (is today) used to find ways to bill more. " Oh absolutely, that is what we use it for, because it is excellent at cracking the weak non-AI computer generated encryption system that is "how doctors get paid." It is more of a intra-medicine war between docs and insurers/CMS, but doesn't actually change costs for the hostages, I mean, customers.

"so long as it’s billed to someone else." You have identified the primary issue. :) We are delighted to use AI when it is our skin/money on the line, but why would insurance/CMS use AI to save "customers" money, or why would patients use AI to save insurance companies or taxpayers money? That's the real alignment question!

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https://www.youtube.com/watch?v=-gKuQ6aT6lg

Peter Griffin (food truck): "Yes Sir everything is expensive because you're paying for it on an iPad. Now if you'll just select a gratuity options are 60%, 90%, and 200%."

This isn't just a food truck thing. Try booking a hotel and deal with the "resort fees". Or airlines jacking on hidden fees.

At a certain point, how much can you blame yourself as a consumer. You have limited time and attention. Can you really compete with a spreadsheet jockey whose one job is to find ways to manipulate you? One day AI's job will be to manipulate you.

At the end of the day, people want your money. Making your fulfilled is one way to do it, but not the only way. Capitalism (and not capitalism) is easier when people have a baseline of human decency.

Transactional relationships aren't enough.

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For the airlines we absolutely can blame ourselves. It's not that the airlines set out to be evil. At first, the major carriers avoided all those fees and just kept charging everything included. People went and booked the cheaper flights in droves -- even knowing things weren't included.

It's not that they are tricking us as much as the person who buys the flight a month of two in advance in the comfort of their home is a different person than the grumpy tired traveler who shows up to the airport and is happy to spend money for a bit of leg room, or to take that extra bag or get a drink.

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There is some price discrimination here, but I think you underrate how powerful "book the thing at the top of the query I just ran on Travelocity" is. As someone that designs and sells products that get ranked on websites, being #1 has such a disproportionate pull regardless of value or how close to #2 that its just overwhelming.

Rather than thinking about this as "do I have the willpower not to be manipulated" think of it from the sellers POV. "I can reliably manipulate X% of people if I do Y." And of course if you don't do it, someone else will, and then you are out of business.

Sometimes competition makes us improve our products, but sometimes it just makes us manipulate customers harder.

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But at that level, I feel you get into philosophical questions about what it even is to cater to customers.

Like I understand Bryan's case here. He felt ripped off and chooses not to go back to that food truck and if he later goes back to a mall and sees one truck with prices and another without he's going to prefer the one with prices. But it's a bit harder to understand the airline case like that.

Not only do we choose to keep going back to sites like booking.com where we have tons of options about how to rank them and we keep choosing price -- except many of us uncheck spirit airlines and the other one like it after a bad experience. Any of those sites could choose to give a ranking that favors airlines they don't charge for extra bags or whatever and they don't -- I suspect because we wouldn't buy it.

Besides, it's also ultimately desierable that people pay for their bags. I don't know what the cost is to the airline but why should people like my wife who always flies with one bag and is happy to sit in a seat with minimal leg room subsidize tall people like me who want to pack the kitchen sink (I mean except for literally me who she directly subsidizes).

Ultimately I think one has to draw a line between manipulation and selling people things that might not be in their best interest.

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Isn't the real villain here social signalling? You didn't want to signal cheapness or insufficient money, right? I mean you had the thought that it was going to be pricey, you no doubt spent more time wrangling your order than it would have taken to check the price. So why didn't you?

I expect because we have certain fears about how people perceive people who ask about the price first. I actually don't think people do judge doing that too much, it's just that there is a correlation between the kind of person who does that and the people who hold up lines with 100 coupons or writing checks in the take out line (not that it's their fault -- the store is in on the coupons -- but we still associate that irritation with them)

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Superb, simple piece. More like this. I was shopping for flatbed trailers last week and noticed many of the local vendors did not list prices for their trailers. Instead their websites stated, “Call for pricing.” Sure sign of a ripoff. I say don’t buy from those who won’t list their prices. And as Kevin Kelly writes in his book Excellent Advice, the best negotiation question to ask is, “Can you do better?”

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The four most powerful words in any negotiation should be uttered by you:

"Can you do better?" Kevin Kelly

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To which the obvious reply is 'I don't negotiate against myself. Make me an offer.'

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And then, after taking up 30 minutes of the salesperson’s time, and learning a great deal about his product, I walk towards the door saying, “No offer? No problem. There’s another shop down the road. Have a good day.” Slim chance I’ll return. Do you let me walk out the door without making an offer?

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Probably. You sound like a lot. There are other shops, true, but there are other customers, too.

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“Sound like a lot?” Is there a typo in there?

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Nope

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Many, many manufacturers enter into retailer agreements prohibiting the publishing of any prices as well as making several covenants effectively fixing price to at least the MSRP. For instance, getting 60% off some excellent shoes recently required that they not allow me the right to return.

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Interesting. Seems like an area worthy of economic study. I’m curious why this practice survives in certain industries.

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The ability to carry hot brands is often life of death in certain categories .. eg Big Box stores, etc., but also, brand/price protection can also be argued to help both the manufacturer and the retailer. Why would a retailer fight to reduce the price knowing that a floor will eventually exist that destroys everyone. The web made this much more obvious.

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You forgot to add: Most DC tourists are couples with children while the one paying learned long ago to never mention price (publicly) in the company of the other, non-paying spouse.

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This was the line of food trucks by the Mall, I'm guessing? Yeah, there's definitely market problems there. You hardly ever see the same food truck twice, seems like, due to limited spots and new people trying out food truck business in the hopes of one day launching a real restaurant. So even if tourists were in the mood to try to investigate or make more informed decisions or pool it online, the value of that information would be nil.

What I do is prioritize novelty. Precisely because of the turnover, there's always something there I've never had before, and so if I'm going to buy anything at all, I can buy something new. If I buy boba, it may be mediocre overpriced boba, but at least I'll have tried boba for the first time.

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Recently I paid 10 euros for a beer.

I went with a friend to a bar. We sat down, and we're just figuring the place out.

There waitress came and asked what we were having. Instead of asking for the drink menu, I just ordered 2 beers.

It happens to all of us.

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Even as a pretty doctrinaire classical liberal, I see the case for mandatory information laws.

The cost to liberty is tiny, the benefit to society large. It's an accommodation to human frailty.

In this case, a law requiring clearly visible prices.

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There is already a mandatory information law: the price needs to be disclosed upon request, this is Bryan's point of blaming himself.

A mandatory information law in DC would mean an expansion of the scope and number of police officers patrolling to catch offenders, as well as an increase in compliance. (Would it be applied to, say, lobbyists as well as food trucks?)

The doctrinaire classical liberal approach should be: more trucks, competition from which will lower prices and expect consumers to improve their own behavior.

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More trucks ?? - Have you ever been to The DC mall?

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Well, yeah. My point is that doesn't seem to be the optimal amount of mandatory info law.

If it were up to me (ha), I'd just say that food truck prices (because food trucks seem to be a particular problem due to DC tourism) must be clearly visible to a person with normal vision from a distance of 6 feet.

I'd let enforcement be entirely based on consumer complaints - I wouldn't spend a penny on patrolling. Maybe I'd post a few signs around town with the complaint phone number. Maybe a small reward for successful complaints that lead to a fine ($50 or so).

I'd enforce gently, with warnings for unrepeated offenses when there was a good faith effort to comply.

Everything in life is more complicated than it seems - every political philosophy (even mine) leads to absurdities if pursued completely strictly. A few small compromises at the margins seem necessary.

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Individual rights is consistently good.

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"....are...."Focus mind BEFORE typing.

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I gnash my teeth and rend my garments. You is right.

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> mandatory information law

Should it be applied to Leftist/nihilist humanities professors?

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> the price needs to be disclosed upon request,

A seller who refused to disclose price would fail.

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Doctors and hospitals are very confused by your comment.

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We are both wrong. Some production costs cant be predicted., eg, med, car repair, spaceships to the moon. But, in the context of stable production costs, sellers and buyers want disclosed prices. There is also price experimentation, called,I believe, price searching. Ive been failing to sell a coat that I dont like at my buying price. I will probably need to lower the price.

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Totally. That's why mandatory nutrition labels have reduced obesity levels.

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Or you need private standards and certification groups. Credit-Card companies (networks, or banks, or processors like square) could decide to requires posted prices. Or you could have a DC Quality Food Trucks Association or whatever they could proudly display the seal on their trucks, and maintain standards. They could sue trucks fraudulently using the seal (which granted does require government courts and trademark law)

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Yes, markets compete for knowledge.

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> human frailty.

Thats the experience of the unfocused mind.

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> benefit to society

Only individuals can benefit. Society is an idea, not a living individual.

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Ok, benefit to the individuals in society. "Society" is the word we use to refer to them. It comes with the implication that some individuals may benefit more or less than others from any given policy, and some may be harmed. When we use terms that refer to groups of individuals, we usually are talking about the summed of benefits and harms.

Yes, individual rights are a powerful mechanism and have proven extremely valuable. They're what prevent the public torture of innocents for the entertainment of billions, even if the net result is positive utility. That's good.

But that doesn't mean rights are always the answer to everything all the time. There may be exceptions at the edges, sometimes. I say this as a strong proponent of individual rights.

As I said above, everything is more complicated than our simplified intellectual models.

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>Society" is the word we use to refer to [individuals].

Society is a perspective on real individuals that includes all relationships among all individuals, including those distant in space and time. It saves mental space and time. What is the population of America? Well, there is Tom, Sally, Juan, Rita....You would be thinking a very long time unless you could think of them all together with the idea, "society." There is no real mystical society above and beyond allegedly unreal individuals. Thats Marxism, Nazism, Christianity.

>some individuals may benefit more or less than others from any given policy,

Long ago, lost in the mists of Left and Right, not even taught in schools anymore, you probably dont know it, there was a society based on the right to life, liberty and the pursuit of happiness. Each individual benefited equally from this politics because protecting his rights was the only purpose of govt. Your politics of a real society and unreal individuals is your hidden context. As you say, "sum of benefits and harms." There is no mystical social sum. There is only the benefits and harms to individuals as individuals., which you evade with the mindlessly bland idea, "policy." Govt is a gun in your face demanding obedience or death. Thats the policy. This is true for protecting or violating individual rights.

> individual rights... extremely valuable.

To your hidden mystical society or to real individuals, each with a moral right to his own life?

>But that doesn't mean rights are always the answer to everything all the time.

Would you tell that to Hitler? When is govt allowed to loot and murder?

> everything is more complicated than our simplified intellectual models.

Ideas simplify by mentally considering many things as one thing, ie, seeing the forest for the trees. Nothing is ignored. "Forest" does not simplify trees by excluding leaves and bark. "Forest" includes everything about every tree. Man needs ideas to mentally connect concrete facts. Man is not a bird eating this concrete seed here and now. Man could be a farmer looking at a seed and, w/his intellect, knowing that the seed can be planted and harvested for more food than the seed alone.

Mans Rights-Ayn Rand

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For a radically new theory of ideas, see _Intro. To Objectivist Epistemology_ by Ayn Rand. It's very abstract but abstracted from common sense, not mysticism or subjectivism.

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Just like Gresham's law says that debased money prevails over sound money, free-market that favor information asymmetry tend to make bad products.

Predatory practice seem to be adopted by the market if they lead to higher profits.

examples:

- Software: you could buy Excel 5 or Excel 98 and be done with it forever. The only change in Excel since 255 years is that it is now subscription based. The Windows operating systems have stopped delivering value to users around 2006 and instead turned into a dystopian telemetry game that drain the computer power to spy on the user.

- Many consumer products that could last forever are replaced with ones with planned obsolescence: disposable razors designed to clog hair and be impossible to wash, carcinogenic non-stick pans that replace a milled cast iron skillet that can last 2 years, plastic electric kettles instead of stainless steel kettle to put on the hob.

- cars with a "proprietary" diagnostic computer that effectively destroys the buyer's property-right

- Mobile phones designed somewhere between disposable razors and cars, with worse impact on environment and privacy.

For software, it is interesting to see that the field was saved by GNU/Linux, and that the judicial system was weaponized by predatory rent-seekers (https://en.wikipedia.org/wiki/SCO_Group) to sue IP claims as adoption grew.

All these predatory practices are increasing GDP while wasting people's time and life quality, like Bastiat's seminal broken window. Some of them like light bulbs and disposable razors are old, but the trend seems to be accelerating with electronics.

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>free-market that favor information asymmetry tend to make bad products.

Your absurd nihilist hatred of mans independent mind, the basic cause of production, is noted. The next time that you need electricity or med care, buy it from a seller who knows as much as you do about producing those life-furthering values. Or, better, move to a primitive tribe in which their tiny knowledge is shared by all. Forget Rousseau and Marx. There is no Garden Of Eden. Read Ayn Rand. Man must toil by the sweat of his mind. Of course, that requires accepting the risk of knowledge as better than socially acceptable ignorance.

"It is the fundamentals of philosophy (particularly, of ethics) that an anti-conceptual person dreads above all else. To understand and to apply them requires a long conceptual chain, which he has made his mind incapable of holding beyond the first, rudimentary links. If his professed beliefs—i.e., the rules and slogans of his group—are challenged, he feels his consciousness dissolving in fog. Hence, his fear of outsiders. The word “outsiders,” to him, means the whole wide world beyond the confines of his village or town or gang—the world of all those people who do not live by his “rules.” He does not know why he feels that outsiders are a deadly threat to him and why they fill him with helpless terror. The threat is not existential, but psycho-epistemological: to deal with them requires that he rise above his “rules” to the level of abstract principles. He would die rather than attempt it."

-Ayn Rand

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I may not have been clear, or you may be projecting what you read if you think it inconsistent with Ayn Rand.

I read Atlas Shrugged, and thought she was against rent-seeking through crony capitalism. There is a way to interpret my post in that way.

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Atlas Shrugged is full of rent-seeking villains, inc/the top one. But your attack on asymmetrical info is consistent w/communist equality. And "predatory" implies force, an impossibility in capitalism. You also evade progressive tech. Failures are part of capitalist experiments,. There is no alternative, no Capitalism is not the Garden Of Eden. If youre not making mistakes, youre not trying hard enough [Jeff Bezos]

> wasting people's time and life quality

Relative to omniscient govt and 300K years of pre-capitalist poverty?? Youre attacking mans independent mind. Its not omniscient. Improving products is a struggle,.w//many failures. Theres no alternative

Brian Simpson, influenced by Rand, wrote Markets Dont Fail,w/a chapter on assymetry, I believe. See also Rands _Capitalism_ for theory and history. And Yaron Brooks economics books. And Andrew Bernsteins Capitalist Manifesto

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When I was a kid, my father was a photographer and he liked pointing out mistakes people make such as taking a flash photo during a football game. Not a single one of those flashes would reach the football field and most people knew it would come back with nothing to see.

I asked my father why they do that? He said something you missed at the ice cream truck. It is the only thing one can do at the moment to capture the thrill. It was a dumb thing to do, but fun anyway.

The lesson for me is that most of life is bullshit desires. This is especially noticeable when retired with plenty of money. Aldous Huxley wasn't quite done with his famous " . . . only the means are man's" quote. Shoot even the means are ape chosen. It is a weak argument to proclaim individuals in a free market are wiser than experts hired by government. Of course It doesn't work to expect rule-of-law to also command wise things to do. But our arguments should be rather, that all of society would be miserable if we can't be dumb on our own. Not that being wise is what counts.

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> It is a weak argument to proclaim individuals in a free market are wiser than experts hired by government.

Your post is so chaotic that this coiuld be sarccasm or serious.

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Hmm... your comment about my post being either sarcasm or serious.

could be a compliment or an insult.

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Your context was unclear. Focus mind BEFORE typing.

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Most BOI readers would know there is no free market in food trucks, particularly in DC.

Having been interested food truck business before, I'd imagine it's also to allow them to price-discriminate at different GEOs - i.e. when they leave DC and, say, camp-out in an Alexandria Farmer Markets... or at a private catering function. So I guess you're right to blame only yourself.

"Yes, I’m the guy who paid $34 for two bobas and an ice cream, but at least I’ll never do so again."

Wait until you have grandchildren! My parents and in-laws spoil my 4 kids... despite my objections! :)

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Bryan

I’ve often thought that the critics of markets are just complaining about taking responsibility.

The adage ‘you’ll reap what you sow’ is seems (to me) obvious and unavoidable.

Well . . . Darwin teaches that isn’t certain.

Nihilism teaches reality isn’t fixed.

Materialism teaches only atoms exist. Atoms can’t think. Therefore humans don’t think.

Maybe now people apply this to all ideas of cause and effect.

We are all using philosophy.

Some aware others not.

Thanks

Clay

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You could have avoided this by knowing that these trucks target tourists. If you wanted good, reasonably priced boba, you should consult a food blog or a yelper you trust

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Lol, I got ripped off by those same trucks and had the same exact experience.

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Cheer up Bryan. If just one person gets a paid subscription because of this article then you're in the black overall.

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No posted price allow the seller to exercise price discrimination. I would bet that if you looked like a poor local kid the price would have been much lower. You might want to hire a kid and test this hypothesis. When you failed to ask what the price was, it also told the seller the shape of your demand curve. Go back and give the seller an A for your price discrimination quiz.

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