Palko writes:
I have no idea whether it is real or apocryphal, but there’s an often referred to study with primates where the they earned tokens that could be exchanged for food. According to the standard version, the subjects soon came to value those tokens more than the treats they could be exchanged for. The hype economy works along similar lines. The ability to get people talking about something (preferably but not always necessarily in a positive way) is tremendously valuable by most traditional standards. For entertainers, it can bring in large audiences. For goods and services, it can drive sales and help maintain customer loyalty. For politicians, it can be votes. For public policy initiatives, it can generate and shore up support. At some point though (and it’s a point we passed quite a while back) the ability to generate buzz becomes disconnected both from the attributes which are supposed to drive it and the objectives it is supposed to serve. It then takes on a life of its own. Hype becomes the primary if not sole metric by which anything is judged.
I agree with Palko that this is happening, and of course we see this in science too, where the goal is to publish a paper in a high-impact journal, or to get lots of citations, or lots of awards and reputation points. The idea would be that these tokens are signs of scientific progress and success. To the extent that’s happening, it’s not so unreasonable to aim for the tokens under the theory that, if you do what it takes to get the tokens, true success will come along the way. Just as, if your goal is to be a top athlete, it’s a reasonable strategy to aim for a championship. But this all becomes a problem if there are other ways to get the tokens than through true scientific progress.
One thing I’d like to add to Palko’s conception is that the ability to aim for buzz rather than sales (in the economics context) will only work if you are already comfortable, right? So an internet entrepreneur can go for clicks and buzz only if he or she is already putting food on the table in some other way. I’m not sure how this fits into the rest of the story.
P.S. Also this:
One of the classic recipes for disaster in a market bubble is focusing exclusively on a sharp increase in demand while ignoring an even greater increase in supply.
I guess everyone who’s putting money into this, is thinking they won’t be the last one to get out.