I just checked out the wikipedia page of Armen Alchian and it appears that he died today <a href="http://en.wikipedia.org/wiki/Armen_Alchian" rel="nofollow">http://en.wikipedia.org/wiki/Armen_Alchian</a>.
Should it be called a theorem? It looks to me more like a theory, since economics is not an exact science like mathematics. According to Wikipedia, [1] a theorem is fundamentally deductive, in contrast with a scientific theory, which is empirical.<p>[1] <a href="http://en.wikipedia.org/wiki/Theorem" rel="nofollow">http://en.wikipedia.org/wiki/Theorem</a>
The article is good, but I need to point the elephant in the room:<p>"In the middle ages, people had to travel long distances to view concerts, which were performed by live musicians. Thus, the fixed costs of consumption were very high. If you bothered to pay a huge amount of money and time, you might as well view a long complex opera or symphony. On the flip side, when fixed costs are as low as a Google search, people prefer short YouTube videos of cats doing cute things. Don’t think that this means that the quality of culture has gone down."<p>By that logic, more people could be watching opera videos on YouTube if they cared, since the opportunity cost is the same.<p>I'm inclined to believe the fact most people prefer cat videos is not because of availability, but because most people are mundane.
By "increase consumption of the higher-quality good," is that in <i>absolute</i> terms, or <i>relative</i> to the lower-quality good?<p>Is there a concrete example of "reasonable" demand functions under which a fixed increase leads to an absolute increase of the higher-quality good?
I know very little about economics. I will be happy to know if this 'theorem' is supported by experimental evidence (none were mentioned in the article). Otherwise it should really be called a hypothesis.