Dodgy Maths: Where Apple Goes Wrong In Calculating The Samsung Damages
YES! We’ve another exciting instalment of the Apple v. Samsung patents battle and this time Apple are asking for over $2 billion in damages from the Korean firm. The problem is that they’ve used a very dodgy indeed method of trying to calculate those damages.
To determine how much individual software features were worth as part of its multi-billion dollar lawsuit, an Apple-paid expert surveyed less than 1,000 consumers about imaginary smartphones and tablets, and included features that weren’t even on trial. Another expert then estimated billions in fees for theoretical negotiations that might have occurred between the two companies, as well as how many smartphones and tablets Apple might have sold in their place.
So, they’ve gone off and asked people theoretical questions about what they might have done. And economists insist that this just isn’t the way that you can gauge people and their actions. It’s an idea called revealed preferences. You don’t believe what anyone tells you, you most certainly don’t believe what they vote for. You look at what they actually do and then calculate back from their actions to tell you what they value.
For example, pretty much everyone says that they’d like to lose a little bit of weight. But economists look at all the porkers and point out that while everyone says this no one does a damn thing about it. Therefore people don’t really want to lose weight because they don’t in fact lose weight.
So, according to an economist at least, asking people which phone they would have bought, maybe, doesn’t actually work. Because asking people questions isn’t a good guide to what they actually do.
Sadly, this economic approach has another problem associated with it. Which is that there’s no other method of trying to work out what the damages Apple has actually suffered are. So we’re left with a method that we know is wrong but which we have to use anyway.