11 January 2010 9:08a Pacific
by Matt Sherman
I am sitting in a cafe and a woman is impressed that “this is the kind of place where people leave their computers unattended”, which I guess is true. With the coming age of the netbook, let’s look at the economics of crime.
The what? Yes, the interesting thing here is what happens when a product becomes commoditized, which I define as “cheap enough for just about everyone”. I contend that the emergence of netbooks will essentially end computer theft.
So why would someone steal a computer?
- To use it themselves
- To sell it for money
Let’s say the average computer costs $2000, and that a would-be thief considers stealing one for themselves. The thief makes a bet: if I win, I am $2000 ahead. If I lose, I am in jail.
If computers average closer to $500, then the upside of stealing is cut by 75%. Imagine if your odds at the craps table just got 75% worse – do you stay in the game? A rational thief would leave the market.
Now, if the thief were hoping to fence the stolen computer, similar dynamics apply. They can no longer get $2000 for the stolen goods. And, because netbooks are cheap, everyone already has one. The market for the thief’s product has dried up.