Life economics

The "beer effect" is a common economic phenomenon in the circulation field, not unique to the beer industry. It refers to the economic phenomenon that demand information is distorted in the process of transmission within the supply chain for the sake of maximizing its own interests because of the information asymmetry between enterprises at all nodes in the supply chain.

In a supply chain, because the information transmission is out of control, retailers are optimistic about the demand, so they increase orders; The increasing demand of retailers has greatly stimulated producers, and the behavior of producers has also greatly stimulated raw material suppliers.

That is to say, the signal is constantly amplified in the process of reverse transmission, and the consumer's demand may only need 10 bottle, but the retailer's order makes the manufacturer blindly optimistic about the demand, causing the impression that it seems to need 100 bottle, while the manufacturer's large order from the upstream supplier gives the impression that it seems to need 1000 bottle. On the contrary, the same is true when demand shrinks.

In the current real estate market, we can often see the shadow of the "beer effect". Due to the distortion of information in the real estate market, developers are full of confidence in the expectations of the real estate market and auction land crazily, which leads to soaring land prices and sharp rise in house prices. Under the psychological influence of consumers, the sales area of real estate has increased year after year.

When investors see that the real estate market is booming, they will increase their investment and inject new funds into the real estate market, which will make real estate developers more confident in the future real estate development, and then bid for land crazily, thus forming a vicious circle of "beer effect" and blowing the bubble of the real estate industry bigger and bigger.

The house price seriously deviates from the real value of the house. If the bubble bursts, it will inevitably lead to a decline in house prices, and investors and developers in the real estate market will taste the consequences in this round of cycle triggered by the "beer effect".

The principle of "beer effect" tells us that enterprises should not be too blind when entering the market, but should do a good job in investigating the market demand first to avoid wasting resources and unnecessary losses because of blind optimism.

2. The principle of "cobweb theory"

"Cobweb theory", also known as "harvest paradox", is a strange phenomenon in market economy, which refers to the theory that the price and output changes of some commodities interact and cause regular periodic changes.

1930 was independently put forward by Schultz of the United States, J. Dingbergen of the Netherlands and Ricky of Italy. Because the continuous change of price and output is like a spider's web, Caldo of Britain named this theory cobweb theory in 1934.

Contrary to classical economic theory, cobweb theory proves that under certain assumptions, after the market equilibrium is broken, the economic system may not be able to automatically restore equilibrium.

The assumptions are: first, there is perfect competition, and every producer thinks that the current market price will continue, and changing his own production plan will not affect the market; Second, the price is determined by the supply, and the supply is determined by the previous market price; Third, the goods produced are not durable goods. These assumptions show that cobweb theory is mainly used to analyze agricultural products. Therefore, for the phenomenon of high yield and no harvest brought by cobweb theory.

We can also understand that in a completely competitive agricultural product market, when the price of an agricultural product rises in one year and brings huge profits to farmers, a large number of farmers will choose to plant this crop in the next year, so for a time, the supply of this agricultural product exceeds demand in the market and the price drops sharply.

Although farmers have achieved a bumper harvest after a year of hard work, their income has not increased. This is also the main reason why many farmers have left the land to work in cities in recent years.

In short, farmers do not have the ability to accurately predict the market, and planting crops is easily influenced by historical experience and blindly follow the trend. In the end, they work hard but can't get the expected income.

In order to eliminate or reduce the cobweb fluctuation of agricultural products market, on the one hand, the government needs to intervene in the market by using economic policies such as supporting prices or ceiling prices, on the other hand, it needs to use the market's own adjustment mechanism to adjust, such as developing characteristic agriculture and using futures market to adjust.

3. Principle of "Parkinson's Law"

Parkinson's Law is the name of bureaucratic phenomenon in economics, which can also be called "bureaucratic disease", "organizational paralysis disease" or "big business disease". It originated from Parkinson's Law published by the famous British historian Northgood Parkinson 1958.

Parkinson's book explains the reasons and consequences of the expansion of institutional personnel: an incompetent official may have three ways out. The first is to apply for resignation and give your seat to someone who has the ability; The second is to let a capable person help him with his work; The third is to appoint two people lower than themselves as assistants.

This first way is absolutely impossible, because many rights will be lost; You can't go the second way, because that capable person will become your opponent; It seems that only the third way is the most suitable. So, two mediocre assistants share his work, and he gives orders from above. They will not pose a threat to their rights.

Since both assistants are incompetent, find yourself two incompetent assistants from top to bottom. In this way, the workload that should have been completed by one person was shared by seven people. By analogy, a leadership system is formed, which is bloated, overstaffed, wrangling with each other and inefficient.

Parkinson also found that in an organization, the increase of institutions and personnel does not come entirely from the needs of real work, but has its own needs and laws. Management activities themselves will produce work, and increasing manpower will produce a management system with overlapping functions and wrangling with each other, thus making the work objectives unclear and not compact, leading to low work efficiency.

Parkinson came to the conclusion that in administrative management, the number of administrative agencies will increase like a pyramid, and the number of administrative personnel will expand. Everyone is very busy, but the organizational efficiency is getting lower and lower. Therefore, this law is also called "pyramid rising" phenomenon.

In real life, Parkinson's Law is very common. No matter which country has institutions, incompetent managers and the need for self-improvement, there will be "Parkinson's Law".

The wide spread of Parkinson's law in the world profoundly reveals people's deep hatred of "official infectious diseases" such as overstaffing and inefficiency caused by this expansion of power. Bureaucracy has never been the product of a country at one time. It has been closely attached to all aspects of human life like hot baked candy.

"Parkinson's Law" brings great harm to organizations. In order to fundamentally solve the crux of Parkinson's Law, a reasonable employment system must be established.

Staff recruitment should be open and transparent to prevent people with ulterior motives from recruiting mediocre people in order to keep their leadership position; At the same time, it is necessary to assess the employees who have already joined the job on the two indicators of labor distribution rate and personnel expense rate, and always pay attention to whether Parkinson's law has played a role in the organization.

Extended data:

Political economics is to highlight the position and role of a class in economic activities, and to study the law of value or economic law spontaneously from a certain side according to the interests of the class it represents, while scientific economics is to consciously study the law of value or economic law as a whole.

Symmetric economics is scientific economics. The core of economics is economic law; In the view of symmetric economics, the optimal allocation and regeneration of resources is only the development and concrete manifestation of economic laws, and the research object of economics should be the economic laws and economic essence behind it, rather than staying at the level of optimal allocation and regeneration of resources.

References:

Baidu encyclopedia-economics