Winning the Hardware Software Game Winning the Hardware-Software Game - 2nd Edition

Using Game Theory to Optimize the Pace of New Technology Adoption
  • How do you encourage speedier adoption of your product or service?
  • How do you increase the value your product or service creates for your customers?
  • How do you extract more of the value created by your product or service for yourself?

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  • The Separate Worlds of Science and Technology

    Throughout most of human history, science and technology existed within completely separate realms of society. Science, or natural philosophy, fell within the realm of the upper ranks of society. Natural philosophers were “uncommitted to any program of useful knowledge,” developing “abstract speculations about the natural world.”[1] Joel Mokyr calls science the sphere of savants.[2]

    In contrast, technology historically fell within the realm of the working classes, those who used their hands to earn a living, so-called fabricants: physicians, engineers, and skilled mechanics. Technology was developed as a tinkering, or learning-by-doing, process, without any understanding of the scientific underpinnings of how things worked.

    Historians James McClellan and Harold Dorn describes the worlds of science and technology as being completely separate, with only a small overlap of applied science:

    Only in those handful of subject areas where societies required and patronized specialized knowledge – astrology/astronomy, literacy, numeracy, aspects of engineering, and medicine for example – is it at all meaningful to speak of a limited existence of applied science. Otherwise, worlds of technology and learned science remained sociologically and institutionally poles apart. The vast bulk of technology was not applied science and had developed according to sociologically distinct craft traditions.[1]

    The Shift to Anticipating a Better Future

    Throughout history, society served gods and kings. New information was presented authoritatively and simply accepted by the masses as being true. During this time, society tended to be backward-looking; that is, people looked to the past and the ancients as the ideal, rather than looking to the future as inspiration as a better time, when society would progress.

    It was the Scientific Revolution (1543 – 1687) that finally ushered in a change in perspective, from a backward- to a forward-looking society: “At the deepest level, the common denominator was the belief in the possibility and desirability of human progress and perfectability through reason and knowledge.”[2] The fundamental features of the Scientific Revolution were: (i) the social utility of science, that is, that science and knowledge could be used to improved man’s well-being, and (ii) the emergence of the scientific method, where new information was gained through experiments that explained natural phenomena.[1]

  • Based on the incentives facing different players in the US medical cannabis market, I believe the market will not achieve mainstream adoption unless or until the US overcomes several hurdles: (i) the classification of cannabis as a Schedule I drug, (ii) cannabis’s lack of FDA approval, (iii) the lack of clear information about and trust in cannabis as a safe and medically efficacious product, and (iv) the social disapproval of cannabis use by a significant portion of society.

    Players in the Medical Cannabis Game

    Let’s start by examining the incentives facing the main participants in the medical cannabis market.

    hurdles to adoption

  • Download PDF

    Timeline of US Marijuana Laws

    California Is Different from Other Legalized States

    Description and Implications of CA Legislation

    Marijuana Supply Chain Regulations and Realities

    Players of the CA Market Transition Game

    CA Market Evolution to Date

    Future Market Evolution

     

    California is currently transitioning from illegal and semi-legal markets for marijuana to legal markets. The black and grey markets for marijuana in California are enormous in both size and scope. For the State to successfully transition to a legal market, it must reign in the size and scope of black market activity. Will the State be able to do this?

    Key players in the Marijuana Transition Game include:

    • State and Local Governments
    • Marijuana Growers
    • Marijuana Distributors
    • Marijuana Dispensaries/Retailers
    • Recreational Users
    • Medical Users
    • Black Market Suppliers

    This analysis examines how the market has evolved to date and how we think the market will continue to evolve in the future.

  • Alcohol Use In America

    Cannabis Use In America

    Prevalence and Social Attitudes

    What Determines an Activity’s Prevalence?

    Social Attitudes and Laws

    Social Acceptance: Alcohol vs. Cannabis

    Social Narratives vs. Reality

    The Role of Common Knowledge

     

    Both alcohol and cannabis have been around for thousands of years, and both have been used for recreational, spiritual, and medical purposes. Both have been a part of life in America since our country’s founding. And to a greater or lesser extent, both have been socially accepted at times, while being prohibited at other times. For the past century, however, there has been a distinct difference in social attitudes between the two: while people tend to accept or reject alcohol, they don’t react to it with fear, a sense of taboo, or disgust, like they do with cannabis. Why is that? This analysis attempts to understand why people tend to accept alcohol but denounce cannabis.

    To better understand Americans’ attitudes toward alcohol and cannabis, I first examine the role each has played in America’s history, I then examine the nature of social acceptance of alcohol vs. cannabis, and then I propose some explanations as to why alcohol has been accepted, perhaps grudgingly at times, while cannabis has been so adamantly rejected.

    I conclude that alcohol has always been used overtly, so everyone can see its effects. Users have validated its use and effects for other users and non-users. However, cannabis has always been used covertly, so people can’t see that it’s safe, enjoyable, and effective for treating medical conditions; that is, users have not been able to validate cannabis use for other users and non-users. The overt vs. covert behavior has created feedback loops encouraging acceptance of alcohol, while stigmatizing acceptance of cannabis.

     

    Alcohol Use in America

    A Brief History of Alcohol Use in America[1]

    Since America’s founding, alcohol has been a part of everyday life.

    The colonists brought with them from Europe a high regard for alcoholic beverages. Distilled and fermented liquors were considered important and invigorating foods, whose restorative powers were a natural blessing. People in all regions and of all classes drank heavily.

    Drunkenness was considered a “personal indiscretion”:

    Drunkenness was condemned and punished, but only as an abuse of a God-given gift. Drink itself was not looked upon as culpable, any more than food deserved blame for the sin of gluttony. Excess was personal indiscretion.

    Drunkenness was controlled using a combination of physical sanctions (fines or whippings) and conventional mechanisms for control, including limits on tavern hours, requirements for taverns to provide food and lodging, and limits on who taverns could serve, as well as the activities in which patrons could engage.

    During the late 1700s through the mid 1800s, however, society experienced rapidly growing immigration, industrialization, urbanization and social change (see Figure 1). Immigrants flooded cities from rural parts of the US and from foreign countries. Massive dislocations, together with loss of support systems, left many unable to cope. They found solace in taverns.

    Figure 1

    1 us pop

    At the same time, the nature of taverns changed, from one overseen by respectable members of society who maintained social control, to one run by “common folk” seeking to commercially exploit liquor.

    These radical social changes created a breakdown in the social norms that had previously discouraged alcohol abuse. Heavy drinking became much more common and caused numerous problems: people were late to work and unable to fulfill their job functions, and drunken men were abusing their wives and children or leaving them without means of support.