A light bulb in Livermore, CA has been working for 107 years.

[Kuciwalker]

And please cut out the 'thinking for you' bs; it is condescending and rude. If you can't stomach the fact that another intelligent person has a different opinion than you, you'll not last long in the real world.

I'm perfectly fine with people having different opinions; notice the difference between my response to Spiffor and my response to you. You avoided providing any actual justification for you claims until I'd laid out an argument against them. Spiffor did not.

[VetLegion]

Kuciwalker is right in this matter. There is no conspiracy against long-life light bulbs.

[Kuciwalker]

The closest thing to the original allegation* that actually happens is probably research to minimize the variance in lifespans.

* that light bulb manufacturers try to get bulbs to expire right after the listed time

[Spiffor]

Peace guys

NO WAR FOR LIGHTBULBS!

[LordShiva]

Originally posted by snoopy369
I charge you to show me how lightbulb companies would make a profit, charging a reasonable amount per bulb, if bulbs lasted 1,000,000 hours.

They'd make a killing off local governments, airports, large factories, etc., where teh cost of sending someone out to replace a blown bulb is so much higher than that of teh bulb itself. They'd pay a huge premium for an everlasting bulb.

[Ben Kenobi]

Obviously it must be a CFL. Why do they suppress that information from the public?

[Omni Rex Draconis]

I am with Kuci on this one (well, minus the insulting tone) - you are not thinking this through, Snoopy.

The $20 light bulb is a strawman - Kuci said roughly the same price, and you went for a 4000% increase. Same with the bankrupt manufacturer; by that logic, there should be no one to make the fad items

The manufacturer does not require a set profit from a fixed market (number of bulb hours in use). He only needs to sell his product for more than it cost him to make. Once the market is saturated, the supply would dwindle until it met the new level of demand.

If he can sell these miracles for $2, then I would be buying them for sure. And if it costs $20 to make a bulb that lasts a million hours, then you yourself have pointed out that it would not sell.

it is certainly possible to make longer lasting tungsten bulbs (lower O2 in the gaseous mixture inside the bulb, thicker tungsten filaments) at a near-zero cost increase.

I would need proof of that claim.


Again with Kuci, I find it difficult to believe in a massive collusion between every manufacturer of every kind. It is far easier for me to blame the consumer.

When the company I work for - the world's biggest technology vendor - purchases an order of parts from a manufacturer, they are offered a choice. We can sell you these units with a failure rate of 30% for $5/unit. Or we can sell them with a 25% failure rate for $8/unit. And so forth...

Which offer do you think my company goes with? I can guarantee that it will be the cheapest that the consumer will allow. A savvy market would be searching the internet to find a manufacturer of dependable products. But price is the ONLY consideration for a large number of the computer buyers I talk to daily.

And they get exactly what they paid for.

[LordShiva]

OTOH, teh light bulb market is oligopolistic in teh developed world.

[Aeson]

... er... nevermind. It would never work...

[Lul Thyme]

Originally posted by Omni Rex Draconis

When the company I work for - the world's biggest technology vendor - purchases an order of parts from a manufacturer, they are offered a choice. We can sell you these units with a failure rate of 30% for $5/unit. Or we can sell them with a 25% failure rate for $8/unit. And so forth...

This is called Price discrimination (see http://en.wikipedia.org/wiki/Price_discrimination for example).
It is well known in economics that sellers should and will do this under many conditions :
-Without collusion
-Even if the production cost of these units is the same.

"by providing a choice between a regular and premium product, consumers are being asked to reveal their degree of price sensitivity (or willingness to pay) for comparable products. Similar techniques are used in pricing business class airline tickets and premium alcoholic drinks, for example."

This allows the sellers to get as much money as possible from each buyer.


I do not know if producing better lightbulbs is expensive or not, all I am saying is that the answer to this question has to examine the process itself. Just the fact that better lightbulbs costs more for the consumer doesn't imply that they cost more to make for the seller.

[Lul Thyme]

Originally posted by Kuciwalker

And then the manufacturer goes bankrupt in three years, as far too few people want to buy their bulbs to support their existence.

Or the manufacturer plans for this and has already converted the factories...

Face it, if the technology existed to actually produce such bulbs economically, someone would have done this already. It's the proverbial $20 in the street. And if it is and they haven't, why don't you demonstrate how to some VC - you might get to do it yourself!

Not only is this far from a practical point of view but it's not even what is predicted by abstract market theory!

By your logic, the price of everything would end up being the price of production for the second most efficient producer minus a small number (since for any other price, the more efficient producer could undercut everyone and "make a killing"). That's seldom what happens. Even a basic demand vs offer curve analysis predicts that if demand is high enough to buy out the production at a certain price, then the price will be no lower than this.

And in practice, price can easily be even higher.


You also ignore known phenomenas like Premium Pricing (see http://en.wikipedia.org/wiki/Premium_pricing for example) where some items are bought in part BECAUSE they are expensive.

There are many items (luxury goods in particular) where there is no correlation (or close to) between production costs and selling prices. All sellers profit for this state of affair and for a hypothetical "new guy", it might be more profitable to join the gang and also charging more than he could than trying a fight for the price, which might not even increase his profits.


I would even argue that, in practice, in MOST markets such a price differentiation occurs REGARDLESS of whether there is a production cost reason for it.


A very common counterexample to your argument is computer chips. For example, computer chips of many different "qualities" (say clockspeed) are manufactured exactly the same way and some manufacturers have been known to purposefully grade some chips lower than they could have simply because they need to differentiate their prices and it's cheaper to simply downgrade some chips than make a new factory to make worse chips. There is no production cost difference for computer chips over a wide range of selling values.


Note again that I do claim that this is happening in the lightbulb market but simply that it cannot be inferred that this is logically impossible or even unlikely on purely economical grounds. This DOES happen in many markets.

[Lul Thyme]

Consider the following hypothetical example.
Some guy is selling diamond rings and they all cost the same to him.

Suppose that A people would be ready to buy them at a price that makes him x profit and B at a price that makes y profit. (Where y>x).

It seems he can make Ax or By profit but there might be an even better strategy.

Suppose that he somehow differentiates the rings to make some of them more attractive somehow. This process can even be downgrading the less attractive ones on purpose if needed. He sells D of the more attractive one at y profit and C of the normal ones at x profit.
He now makes Cx+Dy.
In many examples, ( if C~A, B~D and y>x), this scenario will yield a higher profit than either of the previous one.


The point being:
If it does cost the same to make both bad and good lightbulbs, in terms of duration say, (and I have no idea whether this is the case) it is in fact very normal that manufacturers would make both and sell the bad ones cheaper and the good ones more expensive!

It seems like it might be better to only make the good ones but then since then they have to sell them only at one price. If they sell them expensive, they lose out the customers not ready to pay that price and if they sell them cheap they have a profit lost equivalent to the difference in those prices times the number of people who would have been ready to pay the premium.

Note that this good vs bad can be very subjective but it happens a lot. A lot of clothing company for example sell the same clothes under "name" brands for a lot of $$ and the same clothes under generic brands for cheaper.

In Quebec, there's a generic food brand called No Name (http://en.wikipedia.org/wiki/No_name_(brand)) that sells stocks of brand food cheaper.

In all those examples, there are people willing to pay a premium for things like brands and people that are not willing to do so hence it is profitable for the seller to offer both "premium" goods at premium prices and non-premium goods at low prices even if those good are essentially the same from the seller's point of view.

[Kuciwalker]

The basic problem with you argument is that light bulbs are commodified and no one (at least, no one I know) even looks at the brand name. The only things that distinguishes two packs of lightbulbs are the numbers on the box.

The lack of branding in the light bulb market was an implicit assumption on my part.

[Lul Thyme]

Originally posted by Kuciwalker
The basic problem with you argument is that light bulbs are commodified and no one (at least, no one I know) even looks at the brand name. The only things that distinguishes two packs of lightbulbs are the numbers on the box.

The lack of branding in the light bulb market was an implicit assumption on my part.

Wrong. Branding is just one way to achieve price discrimination. It was just an example. I already gave the example of computer chips manufacturers deliberately underclocking ("changing some numbers on the box") some of their chips for this purpose.

[LordShiva]

Brand is actually pretty important for certain types of lightbulbs (CFLi's, CDM, etc.), but not, admittedly, for incandescents. Still, there's a fair bit of strategic behaviour among teh manufacturers, and teh market is far from being perfectly competitive.