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Quotation of the Day…

Posted By Don Boudreaux On July 16, 2013 @ 9:46 am In Complexity & Emergence,Risk and Safety,Seen and Unseen | Comments Disabled

… is from page 178 of my colleague Dan Klein’s March 2001 Economic Affairs article, “The Demand for and Supply of Assurance” – which is revised and reprinted as chapter 9 in Market Failure or Success [1] (Tyler Cowen & Eric Crampton, eds., 2002) (original emphasis; citation omitted):

A machine-tool company such as Black & Decker makes hundreds of different products, but its customers will generalize to some extent about all of them based on their experience with only a few.  By enlarging its product base the company creates frequent dealings with many of its customers, giving them a better opportunity to evaluate its trustworthiness.  In this way, Black & Decker becomes a provider of assurance, as well as tools.  The inventor-genius may create, de novo, in his basement workshop a fantastic new tool, but it is not a great product until it is combined with assurance.

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[1] Market Failure or Success: http://www.amazon.com/Market-Failure-Success-New-Debate/dp/1843760851/ref=sr_1_1?s=books&ie=UTF8&qid=1373982348&sr=1-1&keywords=eric+crampton+tyler+cowen

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