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February 12, 2013

Comments

Gary

Jonny - I couldn't find your original post on Watchlords, but I did find your posts about the best under-$500 watches. Some of the responses to your posts are pretty nasty.

Regarding the law of diminishing returns, the same thing applies to most hobbies, for example high-end audio. If you have infinite money, there are plenty of speakers, preamps, power amps and other components that cost tens of thousands of dollars each. You can probably get 90% of the performance of many of these items for 10% of the price, but try telling that to high-end audio enthusiasts.

jonnybardo

Gary - Those nasty comments relate back to the other thread. If you're interested, its here:

http://watchlords.forumotion.net/t20395-watch-price-and-the-law-of-diminishing-returns-what-are-you-paying-for-really

It got moved to the "Geekish" sub-forum because one of the members figured out that I have a membership at Watchgeeks (the dedicated Invicta forum) and then a bunch of folks jumped on me for being a "Geek with an agenda". Evidently there is some long-running feud between Watchgeeks and Watchlords involving certain bannings and a general hatred of all things Invicta on Watchlords (at least somewhat for legitimate reasons - the more I learn about Invicta, the less I respect them as a company).

Oh the drama!

Anyhow, speaking of stereos, someone used the exactly same analogy early in that thread - saying something to the effect that a stereophile can tell the difference between a $1000 and $3000 system, but most folks can't.

Ed

Gary I agree in principle about diminishing returns in high end audio. But as someone involved in the hobby for over 40 years, and having the opportunity to hear those megabuck systems, I can tell you that there some components that are a quantum level above the ordinary. They are usually expensive, but not always. The same can be said about cars--a VW big will get you where you want to go, but there is a qualitative difference riding in a car that costs over 100k.

Angelo

But Ed, I worked in radio and went to trade shows with hi-fi equipment and the like---and it really is true that after a certain price point----you can go much, much higher----and the human ear can't tell the difference----the differences are measured by equipment----and marketed as being "superior" based on machines determining frequency response that can't even be appreciated by human hearing. It truly does get silly at a certain point----bragging rights and nothing more. And that's fine if someone is in the hobby and can afford it----but it should be justified as "exclusive, expensive and I like the feeling of owning it." The purpose of a watch is to tell time. And then quality/craftsmanship/materials come into play. A Seiko selling in the high hundreds is probably 85% of many watches that sell well into the thousands. So I agree with that law of diminishing returns. If a watch maker makes the watch in solid gold or trims it in gold---with genuine diamonds----you are paying for that of course, and it's a tangible value. But if it's another stainless steel watch----but "high end" in name----it's hard to convince me that spending twice as much as the Seiko I mentioned above really gains you anything except, again, bragging rights.

jonnybardo

Ed - I agree, but again the issue I was pointing out - which applies to all things, all objects, all manufactured goods - is that the increase in price far out-distances the increase in quality, especially beyond a kind of tipping point. It is kind of like Zeno's arrow - each step is a halving of the distance to your target, and thus smaller and smaller.

I think it may be roughly exponential, like each level increase in quality involves a doubling in price. The exact numbers don't matter but the basic idea is that incremental increases in quality, especially beyond the "standard" range, involves massive increases in price that don't accurately reflect that actual increase in quality.

An example of this is the difference between a $200 and $400 watch. The main different is usually something as relatively minor as a slightly improved watch, a better clasp, and maybe fractionally better movement. All good things, but double the cost? When you get to a $4,000 watch, the differences are still there but less noticeable, more invisible and, in actual practical terms, may come down to the difference between losing 1 minute every month and 1 minute very day, or lasting 50 years versus 15 years. A big difference, yes, but worth thousands of dollars? That's the mirage, the chimera as Jeff calls it. Assigning huge amounts to money comparatively minor increases in quality.

There's also the matter of what one is used to. By way of example, I'm not an audiophile but I like quality in stereo equipment. I've had the same Arcam amplifier for 20 years and love it. I've found that when I go over to someone else's house with noticeably inferior sound quality, I really take notice and my enjoyment is reduced. So in a way, my acclimation to higher quality actually reduces my enjoyment outside of what I'm used to.

Ulysses

Hatred of the Invicta brand is not without justification. That aside, these angry people you encountered are simply further along in their watch addiction than most of us. They have tried these expensive timepieces and as is inevitable, complacency has set in. The grass is always greener. What to us might seem like minor differences stand out like a sore thumb to them. Not like I could afford it, but in my observations i'd put the cut-off point at around $1600. You can get a damn fine and stunning timepiece for that much, making it hard to justify Rolex or Panerai pricing. A watch is a man's sole acceptable ornament. It's what shoes and handbags are for women all rolled into one, so perhaps it is not surprising that so many of us obsess over the things.

Ed

So of all the trade shows you went to, like CES I assume, you never heard anything that. just obviously sounded so much better than your car stereo Angelo? If not, When did you last have your hearing checked?

Angelo

This was quite a while ago, so my hearing was better. And this equipment was studio equipment/home audio, not car stereos. But let's say you compared a middle price range Marantz receiver/speaker set up to a boutique brand selling for twice as much----I don't think ANY of us could tell the difference in sound----or hear an improvement. That Marantz sounded great----even though the more expensive system showed in graphs that it actually was "sounding" better to the machines. But rest assured, for the hi-fi hobbyists----those who could afford it would buy the boutique brand and impress everyone who knew anything about stereo.

jonnybardo

It seems like a post of mine was lost somewhere in the mix.

You are wise, Ulysses. Actually, someone at Watchlords explained that the subtle differences became huge and glaring in their mind. The problem, though, is becoming jaded - establishing a set-point that can only go up.

What are some examples of the best-of $1600 watches, in your mind?

I'd also differentiate between "standard" mass-produced luxury watches like Rolex, Breitling, and Panerai, and the more hand-crafted super-luxury brands like Patek Philippe that involve many hours of finishing, hand-crafting, etc.

This chart basically works:

http://www.velaction.com/lean-information/wp-content/uploads/2009/03/better-not-perfect.jpg

Replace "Return on effort" with "quality" and "effort" with "price" and you get the idea. Meaning, each increase in quality is accompanied by a much larger, even exponential increase, in price. There's a tipping point, a kind of singularit, where the price increase far out-weighs the quality increase.

It is sort of like wines. The difference between $5 and $10 bottle is huge. The difference between $10 and $15 is also large, but not as big. $15 and $20 is also noticeable, but slightly smaller. When you get to around $25-30 the differences get truly small. I'm no wine expert but I've had wines ranging from $5 to $50, and I found that the best value was around $12-15 (I would always shop for $18-20 bottles on sale for $12-15), and that around $25 was the tipping point where I stopped noticing a difference.

Angelo

Jonny: Guns? I think for a 1911 pistol, the "tipping point" is probably around $2000.00. If you choose wisely, you can spend two thousand dollars and get a production gun that is hand finished----beautiful to look at (if you like guns) with excellent sights, incredible accuracy, balanced and "expensive" feel too. You can spend more, but not see any real jump in capability or safety. Then, you can spend a kings ransom for an entirely handcrafted and hand machined, custom pistol. Is it "better?" Yes, probably. But again, not enough (in my opinion) to justify doubling the price or even more than that. And by the way----there are sub-$1000.00 1911s that are wonderful too----but maybe people like me can justify spending $1700-1800 for a "name" and a few extra features and good reviews. Beyond that 2K price point though----the differences become minute, from what I know (and I admit that I'm not an expert, but a novice).

Ulysses

I've given a few examples of brands that produce timepieces in that general reason, though I can't point to a specific model as that would depend on your individual tastes. It's likely you'd find some models you liked. 100% hand-made watches or those using special, difficult to manufacture complications will inevitably cost more but personally I don't have a problem with the mass-produced designs so long as the manufacturer is open and honest about it (which I find they rarely are). It's a complaint often levelled against Japanese high-end watches; that parts of them are made by robots. If a robot can do a better job than a man, I don't mind if it leads to a more precise and robust mechanism.

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