Do Natural Monopolies Need Virtual Regulation?

A very large vendor of avatar body parts and accessories--well, "private parts," mostly--has almost absolute market control, stemming from the extreme benefit of interoperability of those parts, for both different parts on the same avatar and across avatars.

This seems like a natural monopoly, which in RL would be subject to regulation of some sort. Microsoft, for example, is required to expose some interfaces and provide advance notice of changes to those interfaces, and forbidden from bundling certain features. It was pretty much either this, or being broken into a bunch of "Baby Bills" on the model of the AT&T divestiture.

The question is whether some form of pro-competition remedy (e.g., enforced open protocols) would be appropriate for our virtual economy, in this case or any other.

(One aspect that clouds this is licensing of closed protocols. The criteria for licensing in-world seem linked to the ability of the licensee to increase demand for the licensor's products; it's unclear the degree to which this remedies the anti-competitive situation.)

Well, there *are* other systems albeit not quite so visibly advertised ... but the real magic is in Instant Messaging anyway.


A favourite Times reader posting to the editor; 'Sir, why is there only one Monopolies Commision?'

Yes!
God forbid anyone should be allowed to be so good at something that the majority of consumers choose the that product over the others. This kind of disgraceful success must be stopped.

If one person makes the best "Attachment" for the lowest price, Bar none, and twenty, fifty, One hundred competitors make "Attachments" that are Far below his standard, then the one who makes the best Will naturally Take the market, and the others will either Improve, or Go out of Business. If, Not a single competitor has what it takes to match the work of the best one WHY should the creator of the best one be penalized?

Unfortunately promoting the mediochre does No benifit to us as a whole. It removes incentive to excel, and it leaves All of us with nothing but the Sub Standard to choose from.

Angel.

No No No!!!!!!!

Said 'large vendor' does seem to have a pretty good 'hold' on the market (some pun intended). Although.... what is stopping you from creating your own 'parts' and trying to compete? Are you restricted from doing so? Are you not allowed access to the building materials, scripting, texturizing needed? Is there a real chance that this 'large vendor' can force you in to a hostile takeover scenario, if you do decide to compete, essentially buying out all other vendors with the intent of forcing interested buyers in to purchasing only their goods? Or..... is it that no one is willing or interested in trying?

Eeep

Danger! Danger!

The only entity who could possibly impose and enforce regulations would be Linden Lab, and given the situation with the land trading businesss, and how little they've done to level -that- playing field, this is a non starter.

Competition in this virtual world need not be fostered through regulation. All that's needed are competitors. In the scripted prim naughty bits field there are two major players, and who knows how many smaller ones. What sets these guys apart:

1) Superior, INNOVATIVE product
2) Right place, right time
3) Brand recognition

Nothing is stopping someone else from doing it better, and cheaper.

Also, I would be all for encouraging script authors to develop and publish APIs for their products, because in most cases, everyone benefits. I am dead-set against *requiring* it, or imposing any other anti-competition "remedy".

The reason JP is the Bill Gates of prim genitalia is because nobody else has come forward with something that competes with his product. There is no reason to believe that he is engaging in any kind of anti-competitive practices(which would be impossible in SL), therefore no "remedy" is required, other than for someone else to step up to the plate and swing the bat.

I'm quite delighted I have *no* idea who anyone here is talking about - unless this is the brand that has the chattering body parts?

*wonders if they do a little dance too*

To be realistic, a competitor--regardless of quality--could not possibly enter the market at this point because interoperability with the other maker's products is closed and that other maker enjoys near-total market dominance, so for a consumer to consider the product they would have to abandon interoperability with any pre-existing devices they--or any of their partners--might own. (For what it's worth, I have no interest in this market, but I'm interested in the virtual economics of this situation.)

I don't think you're using the term "natural monopoly" correctly. This is not an example of a natural monopoly at all.

What it boils down to is this;

The people want cocks.
This company supplies cocks.
The people are now supplied with cocks.

Everybody's happy.

The makers of buggy whips strongly agree.

Just you wait until they get a Voice!

I wonder what kind of an accent they would have?

The all-singing, all-dancing body part! It could be the Next Big Thing.

interoperability - The term might matter to some... The newbie running around Sexy Cove with his non-detailed wanger doesn't seem to care much about how well it operates in conjunction with their partner's equipment. Having 'compatablitity' is a nice feature... but it doesn't stop users with two different pieces of equipment from simulating an 'act'.

I'm curious as to why this particular "Product" was mentioned. Now we can add Protectionism as another RL nuisance to be dragged into SL.

Perhaps a confusing choice of terms, now that I see in Wikipedia that there are multiple meanings. To clarify, I meant it in the same way it was used by telecoms and Microsoft (the first definition in Wikipedia). Or in more words, a monopoly due to some inherent benefit (lower societal cost) of a single supplier (such as economy of scale or interoperability).

I want to be the car!

Oh, er, wait...

Assuming you mean who I think you mean, their nearest competitor (that I know of) has a MUCH better HUD set up. It tracks something like 10 vectors, rather than just arousal, and allows you to customize your responses to your natural predilections just by engaging in your favored activities. I understand the 'big guy' has developed something vaguely similar, but it requires fiddling with notecards, doesn't provide as many options, and is currently only available on the latest boy parts. 'Big guy' has better brand recognition and a more extensive line, but there are still innovations to be made. *shrug*

GREAT!! Now I really want to know who THAT is! IM me.

*peers* Actually, that's not quite true. If someone wanted to compete they can. Nothing is preventing them from doing just that. But for competition to *ahem* arise, there must first be someone with a combination of skill and drive, along with being *snerk* dissatisfied with either the company+ or it's product.

If there are none who possess the skill and drive who are also dissatisfied, then competition will not *giggle* spring up. Pure and simple. Or in this case, not But no.. really, we don't need regulations for that!

+ If one is dissatisfied with the company, there are plenty of 'services' out there that can help!

Considering that every newbie male in SL has an entirely different product that they proudly display, the danger here is?????

If there is a benefit to the monopoly, then why change it?

What I think the original poster is talking about is "network effect" - where products get more valuable, the more people use them.

Network effect is the reason why there was a lot of doubt, with RL government, about whether Microsoft really had a monopoly or not. Windows' monopoly is basically because of network effect (it's popular because a lot of people already use it, and also because it has the most software, which is a consequence of a lot of people already using it) and their argument was that just because they made a good operating system, and operating systems naturally have network effect, shouldn't make them subject to monopoly regulations because they hadn't done anything particularly intended to claim a monopoly (note, this statement about MS may be in doubt, I'm just quoting what MS said, but the principle is sound) - they just did their best at making a particular type of product.

The problem is that real life also shows that network effect _does_ have the power to defeat innovation. There are quite a few cases IRL where a new product with a nifty idea arrived on a market too late, and nobody used it because most people were already using the existing product and it was necessary/desirable to interoperate with them.

The problem is compounded in SL by the fact that, because things can be infinately reproduced, a single individual can have the same kind of manufacturing power that would require a factory and thus a big company in real life. IRL, a group of companies getting together and trading R&D in secret, thereby making it harder for competitors to get in, would be a cartel - but in Second Life that can be just a group of friends meeting up and talking about the nifty things they've managed to script recently. To try and regulate that would be devastatingly draconian and nearly impossible to do - but it can have an effect on the market similar to the cartel's effect. On the other other hand, it can have a beneficial effect too, because those same groups can help new creators too.. but on the other, other, other hand, they can't guarantee to help every new creator who's interested, and those they don't help, they hurt.

Basically although it is a concern I don't think it is something that can be done anything about. Since SL has become a more capitalist system it is inevitable that the days of being able to build exactly what you personally wanted and get attention and make money doing it are numbered, if not already over in certain fields, and will be replaced by a more business-oriented approach of targeting market niches even if it's not what you'd like to do best.

You know, when he first started out, he didn't have a monopoly. Far from it, he was the underdog. There's absolutely nothing to keep somebody else from coming along and going into competition with him and even kicking his patootie... Oh, wait. Except for the fact that he makes a great product.

To be competative, no matter how much the market is flooded with a certain company's product, on only needs to make a better product.

I'm quite certain we all know which company you are discussing, and I personally wouldn't use that product if they paid me the L$ to do so. There are much better products of this line out there, imo. Many do like this line and continue to utilise them.

Called "choice". If anyone has a monoploly in SL, it is due to the fact of the idea being born in thier heads or of superior skills in manufacturing a product that none can copy. At that point, I would call it "patent" more than "monoply" even though patents don't recognise IP. I use the word here for reference. If they can make a product, and you can't, you are forced to buy it from them if you want it. If you make a product that they can't, they are forced to buy it from you if they want it.

Is that clear enough mud? *grins*

~Jessy

Now that we have sculpties and they can be animated I figure pretty soon the aforementioned "parts" will actually start mouthing the cliches instead of just texting them.