Re: [ga] Date: Wed, 9 Jan 2002 15:53:53 -0500

[George Kirikos <gkirikos@yahoo.com>]

Hello,

--- William X Walsh <william@wxsoft.info> wrote:
> 
> Everyone in this discussion should take a time out and read this one,
> and then read it again.

> Wednesday, Wednesday, January 09, 2002, 1:28:19 PM, Elliot Noss
> wrote:
> > The Inefficiency of flat pricing
> > ---------------------------------
> > The current market for domain names is characterized by flat-priced
> supply
> > and variable-priced demand. I do not take a politial position on
> this, I
> > merely note it as observation. This market inefficiency (again
> observation
> > not position) has lead to the existance of a robust secondary
> market. It has
> > also lead to a significant amount of the current CNO namespace
> sitting
> > unused.
> 
> > I have strong reservations about any solution geared at the
> expiring market
> > that magnifies that inefficiency. By definition it leaves money on
> the table
> > and leaves demand unfulfilled at the same time. The worst of both
> worlds.
> > Ideally we could find a solution that was able to create a robust,
> efficient
> > secondary market which would benefit registrars and the registry,
> but if
> > done properly would most benefit registrants.

I believe the premise that flat-priced "supply" is an inefficiency
because it doesn't match a variable-priced demand is actually
incorrect. If one has studied economics, the case of "perfect
competition" is where the supply curve is flat. Thus, all the "surplus"
goes to the consumers (domain registrants), and suppliers/producers
(registrars and registry) see only normal profits. This isn't thus an
inefficiency, it would be what ICANN and market regulators would
desire.

It's an imperfect analogy, though, as domains are "one of a kind", and
can't be perfectly substituted, like RAM chips or gold or pork bellies.
The quantity is always going to be exactly 1, regardless of price.
There isn't really a "curve" at all, there are just "points" in space
in the price-quantity graph. One can't buy 2 sex.com's, or 11
eBay.com's.

Sincerely,

George Kirikos
http://www.kirikos.com/

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