34 Comments

It's been a while, but I think such a move would be an antitrust violation - if the patent holder gave preferred licensing terms only to other members of the standards committee.

Usually licensing of patents necessary to implement a standard (I and I suspect a court would think "efficiently enough to be practical" is implied there) has to be done on a non-discriminatory basis. All applicants have to be offered the same terms.

Of course, actors try to play games at the edges. If an implementation is costly and time-consuming, and requires expertise to do well (expertise that takes time to develop), a player who has already made those investments will try to get that technology mandated in the standard, for the sake of the time-to-market advantage and because they think that by starting further up the learning curve, they may have a sustainable advantage over competitors.

OTOH, their competitors are watching for just such moves.

Sometimes people get away with stuff. Other times there's log-rolling (I'll let your pet thing in if you'll let mine in), etc.

Other times the high-investment thing is really enough better than the alternatives that it's worthwhile letting somebody have an advantage from their previous investment, for example if competitors think their resulting less competitive position might be outweighed by creating a bigger market.

Of course some players have longer time horizons than others, and some have a more enlightened view of their self-interest than others.

In other words, politics.

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Thanks! But how is this not horribly abused?

For instance the obvious cartel move in tech would be to release a standard that demands tech which is theoretically open, non-exclusive etc but requires features whose *efficent* implementation requires tech/trade secrets known only to one of the companies making the standard (and throw each such company that bone).

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You write that “if min quality regulations only actually take away the choices that would otherwise be made by the lowest one quarter of the population, the other three quarters can sincerely support those regulations, and feel good about showing that they are not low status.“ This is your principal explanation of min-quality regs, and it is a very plausible explanation. But elsewhere you use the term ‘elite(s)’ much too freely in expounding your view. The top three-quarters of the population is not well-labeled “elite’.

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Existing antitrust law has provisions for competitors to cooperate to produce standards.

This is the domain of ANSI, ISO, etc.

To avoid antitrust problems, firms attempting to set standards must meet certain requirements re openness, non-exclusivity, making the standard available to all competitors, etc. And of course they aren't allowed to standardize pricing. (But in some cases they can standardize pricing *models*.)

Source: I used to do this for a living.

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Limited mental ability is captured by "Sloppy and error-prone".

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So the issue is not buying something that exceeds my requirements, but buying something expensive when something cheaper would have sufficed?

The difference is that the price at which a good is sold to the public is by definition public information. It is also simple information. If I "mistakenly" spend too much, it's not because the qualities of what I was buying were concealed from me, but because the time it would take to research alternatives is too valuable to me.

By contrast if I mistakenly buy something that falls below the standards I expected, usually it is because the information involved is not public by nature. Correcting the mistake would often involve tracking the manufacturing process and the supply chain or technical knowledge of medical science, metallurgy, etc. I could offload this burden on a private regulatory agency but deciding between competitors would still require a great deal of specialized knowledge and time spend in research. I would more often have to leave a store empty-handed if despite dealing in essentially what I was looking for they relied on different regulators. I would also have to worry that friends and associates might have lower standards. I would have to ask about the quality of the meat at the cookout, or the quality of the toys that their kids shared with mine, questions that might offend by implying they might not be able to afford acceptable goods.

All this reminds my of friends that are vegan or keep kosher. And those requirements are actually relatively simple and non-technical, and apply mainly to a single class of goods! Holding standards that are not universally enforced requires a certainly nontrivial amount of effort, especially when the people you are asking for information may be incentivized to mislead you. This would impose a cognitive and social burden on even extremely simple transactions.

I could be misunderstanding you. Being afraid of spending too much mistakenly would not really be solved by banning high-quality goods in the first place. What other consequences result from such mistakes? Are they comparable to the consequences that can result from mistakenly buying low-quality goods?

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I think the min quality regs for housing are really a kind of zoning reg.

We don't want to say it but probably one of the biggest things people pay for in a home is the ability to exclude low-status individuals from our neighborhood. Low status individuals living in the area reduce the value of the homes there and interfere with people's enjoyment of them but we can't explicitly exclude them so we pass regulations that ensure a minimum price per occupant which have the same effect.

At least in this case I don't think futarchy helps because the delivered value to the resident is being able to exclude low status people while adopting the plausible excuse that they are just concerned about people's welfare etc… To much information threatens to unravel that…we need enough people to be sufficiently uninformed that someone can't be sure if I'm supporting max occupancy laws because I really (wrongly) believe they protect people or to keep out low status folks.

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Out of curiosity in cases where having a truly standardized product across the industry really does benefit the consumers do anti-trust laws stop industries from implementing such standards?

For instance, could all the big grocery stores get together and vote on what it takes to qualify as fruit-cocktail (otherwise forced to be branded substandard) or would that create anti-trust problems?

If they could I retract my argument below.

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While your analysis is certainly true of lots of regulations I think we should also consider the limited mental/computational capacity of consumers as a significant factor. At least with respect to some, generally low priced frequently purchased goods, the value of knowing what to expect might be much higher than the value in being able to purchase non-compliant products and one might worry that third party standards bodies would lack the power or legal ability to actually ensure the standards are adopted.

I think this is backed up by the fact that for many food regs (e.g. there must be such and such percent of cherries in fruit cocktail, canned pineapple chunks must be so big) one is allowed to sell violating products but only if they are labeled as "substandard" but yet we never ever see such products. Either people are so irrational as to be unable to realize that "substandard fruit cocktail" could be more desirable in a certain situation (giving weight to consumer protection theory) or face some other constraint that keeps such products off the market.

Of course your analysis is surely right in many cases.

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Of note, most people I speak with who support product bans seem to emit one or both of the following:

1. They prefer that someone else does the quality checking for them, rather than relying on doing the checking themselves... which results in them being quite ill-informed in many cases about even the most basic details of the banned items. (We are slaves to this concept, collectively, mainly due to the onerous onslaught of advertising IMO, as well as the 24 hour news cycle).

2. When considering the (supposed) credentials of the regulator doing the proxied product quality checks, they invariably believe that the distant regulator is smarter, better informed, or otherwise better qualified to make the decision for them.

I welcome your thoughts...

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I believe you have unwittingly just solidified the argument against government controls / bans of nearly any variety... as well as making a great case for the free market. YMMV

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Zoning regs are close to minimum sq ft/resident regs and sq ft/ resident is an important dimension of quality.

Thanks for the link. It's interesting but I think your idea is too complicated to be become a reality. The average person is much more likely to vote for something like rent controls because they can understand them

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I've been talking abstractly about prices and consequences of product choices. Why would safety impacts matter differently than other impacts?

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I notice you don't devote any space to exploring the safety ramifications of quality regs.

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One common argument against pornography/casual sex is that it is a low quality form of sexual satisfaction/love, and that people must be protected against it to achieve higher forms.If prostitution was more common, I think a similar argument would be used directly against it.

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Asserting your status and wanting "elite status" is perfectly fine of course. NTTAWWT

Those people asserting their status are making their lives very fragile however by all this conspcious consumption. Lack of "convenience" is very expensive. Sure, it's part coordination problem, because an overpriced, overregulated neighbourhood creates an externality of a higher poverty-density elsewhere, forcing other status-junkies to do the same move.This itself creates more poverty due to overpriced cost of living and destroys a lot of the saftey needed for starting a family for the status-junkies themselves. What matters more is the hyperbolic discounting in status going on. Status now must be perceived as much more important than status later to explain this phenomenon. People don't seem to notice or care, that high rents, a restaurant habit and a shiny new car might give them more perceived status in the short term, but at the cost of making their lives so fragile, that they're facing the risk of status loss by financial ruin. For a high-status couple, that would be in seriuos financial trouble, if one or both of them lost their job, had an accident or be affected by something perfectly mundane like an economic crisis, I'd say they're behaving extremely irrationally because they're led astray by their forager values which makes them undeestimate how important and controllable the future actually is.

Unless the average denizen of a gentrified or NIMBY-area is financially independent and has no reasonable worries about money at all. [I highly doubt that.]

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