a thoughtful web.
Good ideas and conversation. No ads, no tracking.   Login or Take a Tour!
comment
wasoxygen  ·  3261 days ago  ·  link  ·    ·  parent  ·  post: Oil vs. Big Mac: Double or Nothing

This is insightful. I have had some confusion about what exactly I am betting on. Simon's argument applied to all consumer goods:

    The average cost of all consumer goods taken together—an index of consumer prices—has fallen over the years in more-developed countries, measured in terms of what an unskilled worker can buy; this is proven by the long-run increase in the standard of living.

It's hard to measure what an unskilled worker can buy, though that is a valuable metric in theory. Next best is to measure what a dollar can buy, with the complication of adjusting for inflation. This was the basis of Simon's famous bet, and some of the metals his opponent picked dropped in price even before adjusting for inflation.

I ended up with oil vs. burgers, and I hoped that the mass-produced natural resource would exhibit the trend more clearly than individually-made burgers. But the fact that gasoline is shopped for as a commodity (more so than any other product I can think of) means price is the only way to compete, and we saw that gas stations have almost no margins.

While "dollar menu" does not put candlelight and tablecloths in mind, McDonald's can compete with tastier recipes, cleaner bathrooms, play areas, and a reputation for not poisoning customers often.