In private corporate hands, the same technology could be used by a monopolist or differentiated monopolistic competitor to achieve perfect price discrimination. All our surplus now belongs to the corps.
- As Econproph says, this does not apply in monopolistic or monopolistically competitive markets. All the more reason to keep markets competitive.
- I have glibly assumed that Stealichnaya can easily come up with £12 of enhancements for a cost of £8. This is not necessarily true; but if it isn't, then we are simply left with the old situation where they sell the bottle on its own for £15. I do believe, however, that there is great scope for suppliers to add value in this way.
...for decades it's been assumed that there is no way to give people an incentive to be honest about the value they place on public goods while maintaining the fairness of the arrangement.
Second, how on earth do they measure people's real valuations with a fMRI machine? I can't really see how this is even possible with current technology. Most likely, they used a clever game theoretic design to make people think the fMRI machine worked, and thus give the subjects an incentive to be honest. Remember that scene from The Wire?