Monday, December 6, 2010

At least, the Sun rose this morning

A Spanish woman is going to start charging for our use of the Sun. At least, she'll start trying. Here is an excerpt from Jeff Ely's comment on Sun ownership:

She will soon begin charging for use. I advise her to hire a good consultant because pricing The Sun is not your run-of-the-mill profit maximization exercise. First of all, The Sun is a public good. No individual Earthling’s willingness to pay incorporates the total social value created by his purchase. So it’s going to be hard to capitalize on the true market value of your product even if you could get 100% market share.

Even worse, its a non-excludable public good. Which means you have to cope with a massive free-rider problem. As long as one of us pays for it, you turn it on, we all get to use it. So if you just set a price for The Sun, forget about market share, at most your gonna sell to just one of us.

Of course, all of this analysis presumes the ability to turn off the Sun. The woman -- even as owner of the Sun -- won't be able to do that (I hope). Ely's post points out that the woman would face problems collecting revenue even with a superhuman ability to extinguish light from Earth.

You may wonder why this woman decided to own the Sun. Here's her reasoning:

It is time to start doing things the right way, if there is an idea for how to generate income and improve the economy and people's well-being, why not do it?

She's misguided, but at least she's benevolent. I wonder how benevolent she'll sound when she needs to threaten to extinguish the Sun.

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