Horolonomics

This post has been subconsciously rattling around in my head since the very early days of Horolonomics. Never leave your wingman. For some reason it coalesced into something a bit more substantive over the past few days. The TLDR on this is that the existence of Veblen effects in the luxury watch market implies there are probably multiple equilibria. The economics of markets with multiple equilibria is quite different than the textbook view of markets. In such markets, expectations and herd behavior are extremely important. These can quite significantly change the price of a product, even if all market fundamentals are stable. Before we explore these results, let's begin with some first principles. Most markets follow the law of demand: as price goes up, the quantity demanded of a product declines. As I've discussed previously , luxury markets are different. They typically "break the law" when it comes to demand: when price increases, people may actuall...

Dr. Robert S. Dietz was "one of the most irritating as well as influential geologists of the 20th century," at least according to a 1998 piece published in The Geological Society of America Memorials . Robert Dietz scuba diving in Japan, 1953. Source: UCSD archives. The same piece notes that, "a mountain in Antarctica, a tablemount on the Pacific Ocean floor, and an asteroid somewhere in orbit between Mars and Jupiter," were all named in his honor. This is the story of a period of time in Dietz' life and the watches he owned during that time. I first encountered Deitz' story when I read a piece by Jose "Perezcope" on the Rolex Deep Sea Special series of watches. The commemorative edition of the Rolex Deep Sea Special. Two examples of this watch are on the auction block this month. They have garnered a fair bit of media coverage. Jose's work is required reading for anyone wishing to learn about the "fog of history" ...