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No, the concept the author is talking about is the Jevons paradox, just like the title says. The law of demand frames demand as a function of price and utility
by pdpi 1mo ago
No, the concept the author is talking about is the Jevons paradox, just like the title says.
The law of demand frames demand as a function of price and utility — demand is monotonically non-decreasing with utility (the more useful it is, the more people want it), and monotonically non-increasing with price (the pricier it is, the less people want it), but e.g. Giffen goods and Veblen goods break the "monotonically non-increasing with price" assumption of the law of demand.
You can add efficiency to that equation — demand is a function of price, utility and efficiency, and it is also monotonically non-increasing efficiency (The less of it you need, the less people want it). If you could get twice as much saltiness from table salt, you'd cut down demand by 50%.
The Jevons paradox is about the cases where demand isn't non-increasing with efficiency, because utility is itself a function of efficiency. Increased efficiency directly lowers demand, but, because it increases utility, it also increases demand indirectly.
The paradox is usually framed as more efficiency -> more demand (because of the intermediate "more utility" step), but the author is framing it in the opposite direction, as less efficiency -> less demand (because of the intermediate "less utility"). I would argue it's just that the paradox works both ways, rather than calling it a "reverse", but that's me.
- cubefox 1mo ago> I would argue it's just that the paradox works both ways, rather than calling it a "reverse", but that's me. No you are right, it's the same paradox, not some distinct reverse form. If more x can cause more y, then it's logically equivalent that less x can cause less y.