No, the concept the author is talking about is the Jevons paradox, just like the title says.

The law of demand frames demand as a function of price and utility — demand is monotonically non-decreasing with utility (the more useful it is, the more people want it), and monotonically non-increasing with price (the pricier it is, the less people want it), but e.g. Giffen goods and Veblen goods break the "monotonically non-increasing with price" assumption of the law of demand.

You can add efficiency to that equation — demand is a function of price, utility and efficiency, and it is also monotonically non-increasing efficiency (The less of it you need, the less people want it). If you could get twice as much saltiness from table salt, you'd cut down demand by 50%.

The Jevons paradox is about the cases where demand isn't non-increasing with efficiency, because utility is itself a function of efficiency. Increased efficiency directly lowers demand, but, because it increases utility, it also increases demand indirectly.

The paradox is usually framed as more efficiency -> more demand (because of the intermediate "more utility" step), but the author is framing it in the opposite direction, as less efficiency -> less demand (because of the intermediate "less utility"). I would argue it's just that the paradox works both ways, rather than calling it a "reverse", but that's me.

Not a troll. As recently as the 1870s, when Jevons, Menger, and Walras pioneered the Marginal Revolution in economics, this was a deep new insight about elasticity.

Imagine yourself a shop keeper, hoping to boost the money coming in at the till. If you increase prices by 10%, you will get more? Right?

That depends on the elasticity of demand. If the elasticity is two, the drop in demand is twice the increase in price. 0.8 times 1.1 is 0.88. Takings fall from $100 to $88.

But if the elasticity is one half, the drop in demand is half the increase in price. 0.95 times 1.1 is 1.045. Takings rise from $100 to $104.5.

When the price goes up the shop always sells less goods, (Law of Demand) but that still leaves it unclear whether more or less money goes in the till. This is first year University economics today.

Back in 1865, it was obvious to every-one that the increased efficiency of steam engines would lead to a reduced demand for coal. Jevons pointed out that increased efficiency makes steam power cheaper. Goodbye water wheel, hello steam engine. More steam engines, greater consumption of steam power, any-one who wants to make a prediction needs to invent the concept of elasticity and try to measure it. Greater than one? Less than one? That is going to decide whether total demand rises or falls.

exactly the Law of Demand, it is more intuitive

Supply and demand says when something is cheaper (or produced more efficiently), people will use more of it. But the critical part is that it doesn't say people will spend more on it.

Jevon's paradox is a special case of supply and demand, where people actually end up spending more money because something is cheaper.

It's interesting because consumption then grows in unpredictable ways: it can drive innovation even in cases where markets are constrained by monopolies, for example, where in non-Jevons cases producers would have no incentive to lower prices.

> Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use

I think these are the same, because efficiency is value over cost. In the original formulation of the paradox, a more efficient steam engine lead to a rise in coal consumption. You can look at this as a "money buys coal, coal drives locomotion" system, where the latter part was improved. Modulo practical issues with coal (transport, storage, etc), dropping the price of coal would (probably?) lead to the same effect, since the end result is that locomotion per money is increased. For an outside observer, it doesn't matter if you get more coal per money or more locomotion per coal.

> standard supply and demand

Standard supply and demand doesn't say anything about increase of spend. If food prices drop, I'm not going to buy more food. I might buy better food for the same budget, but there's no reason why my total food spend should increase.

> I would argue that is not Jevons paradox but standard supply and demand (and this "reverse Jevons paradox" too).

Kinda yes. How do you derive total spend from supply-demand curves? Multiply price and quantity at an intersection point. Likewise, you can predict total spend by multiplying p and q on the demand curve.

The difference in total spend is difference between these areas. For the total spend to increase with a drop in price, the the demand must rise faster.

Jevon's paradox implies that the price equilibrium is at the highly elastic portion of the demand curve.

> Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use

While that's mostly true in practical reality in established economies, that does not strictly have to be the case. On the consumer side, especially in manufacturing, there's very little difference between unit price of a good falling and input unit per output units dropping as both lead to decreased COGS. In both cases, market realities might unlock alternative approaches (the classic being robot replacing Robert), leading to increased demand.

I think it's still valid to see this as an example of the Jevons paradox: Your resource is money, and reduced per-unit cost means you are using your money (resource) more efficiently. If the total spend now goes up instead of stagnating or decreasing, you've got Jevons

you are absolutely correct, the author is putting the cart before the horse.

Not an issue for me anymore. I make a change, then tell the agent to make the ticket too. lol

I think it's a paradox in the same way that the non-reverse is. The spending might go down more than it's proportion of price increase.

An example not anchored in anything: If public transit costs x, I'll use it every day. If public transit suddenly costs 2x, I'm not gonna use it every other day, I'll rather find an alternative and use 0.

But you want to maximize profit, not sales.

A very old joke:

- Dad, dad, have you seen - the prices went up so much! Does this mean you will stop drinking now?

- No son, this means you will eat less.

If you had the right OS support for JS apps - all those apps that package a full chrome browser all of a sudden would have close to zero memory footprint.

And several other big tech with bad cultures

Indeed. My first thought was that this is a roundabout name for ordinary "rulebook slowdown", but of course there are other ways to increase the cost of useful behavior, not just rules.

It leads to an interesting way to think about company and civic health as well. Instead of focussing purely on incentives, one might assume that many are inclined to do good stuff anyway, and then ask: are we lowering the cost of all desired behavior as much as possible? And are we doing it for as many people as possible?

Except that revenue doesn’t crater in a floating exchange rate system. Revenue from them craters but the money moves elsewhere and revenue improves there - including an increase in total transactions. Total revenue will always be Total spend less what people decide to financially save rather than spend. Because tax are percentages and the process is a geometric series.