4 ms·

> See, there is no downside to collusion for parties, only upside. The downside is that collusion preserves market share status quo. For those hoping to gain m

by harryh 10y ago

> See, there is no downside to collusion for parties, only upside. The downside is that collusion preserves market share status quo. For those hoping to gain market share (like Sprint and T-Mobile) collusion gets in the way of that goal.

jacquesm 10y ago
You're missing the point. You are presuming the market is functioning, my point is that if it does not the only losers will be the consumers all else being equal. It is perfectly possible to compete for market share while at the same time colluding on the price of a part of your offering. All the parties competing will come out ahead in that scheme at the expense of the consumers. You can compete on the kind of handsets you offer, your marketing message and the various demographic selectors. You can compete on coverage of the market, availability of the service, quality and so on.
- harryh 10y ago
  Sprint & T-Mobile both aggressively compete on price.
  - nitrogen 10y ago
    They may market based on price, but that doesn't mean that the prices are going down / bandwidth caps going up as fast as they should, or at all.
    - tcoppi 10y ago
      Yeah, and they actually aren't dropping all that much. T-Mobile's prices have gone up the past year or two for new single/two person accounts with the same amount of data. Family prices seem to have dropped slightly but not very much. Sprint's situation is similar.
- rayiner 10y ago
  He's not. Economic theory tells us that in a market with multiple competitors, collusion is inherently unstable: while in the short run companies may be able to keep it up, in the long run there is a strong incentive to break the collusive pact because whichever company does so will rapidly gain market share at the expense of the others. Your argument to the contrary is based on piling speculation on top of speculation. Not only are we to assume--without evidence--that the carriers are colluding, we must also ignore what we know about T-Mobile's and Sprint's incentives to break the collusion and grab market share because they are, in fact, making tons of money but hiding it through clever accounting. It's not that collusion isn't a possibility in cellular markets in the abstract. It's that it's highly unlikely in a market where one of the alleged colluders is bleeding money and customers and faces bankruptcy.
  - jacquesm 10y ago
    You mean: 'without evidence that I'm willing to consider about these specific competitors in this particular market'. But you are willfully ignoring the evidence from all the other competitors in all the other markets doing exactly that. In other words: you are establishing that the competition must be efficient in spite of the fact that the prices for data transfer in your neck of the woods happen to be the same as they are in areas where carriers have already been established to collude. Now I'm really happy that that is the standard that you'd apply to find say a defendant guilty in some court of law, but this is not a court of law and circumstantial evidence is fine by me in the case of multinationals that refuse to open their books to the point where one could establish whether or not their margins are artificially inflated or arrived at in ways that are not kosher. But, since you seem to be very much of the opinion that carriers are entities that deserve a lot of sympathy for their present day miserable situation (rather than that they offer vast amounts of money for spectrum and then overcharge consumers in order to make this money back) I hope you will decide to strike out for the underdog here and to offer your carrier an even larger premium than they are already extracting from you for the data that you use. I find it interesting that you begin the whole discussion on a note of 'everybody will charge what they will' with Apple as the example (of clear graft) and end on the present one, the cognitive dissonance is so strong that I really wonder how carriers have managed to pull the wool so thoroughly over your eyes that you can't see what's going on. You have to commend them for managing this, it's a long time since the break-up of Bell in the US and all the ugliness that has come to light in countries all over the world but to see it so successfully papered over that they could essentially get away with it in broad daylight is interesting to me. If there is one aspect of technology that is rotten to the core when it comes to extracting money for nothing from the populace it is telcos and the industry requires very careful monitoring and the occasional government intervention to stop them from their worst excesses. Any and all appearance to the contrary may safely be interpreted as successful marketing. Note that since it requires a license to operate the market is far from efficient in the present and that in quite a few countries with so-called free markets when it comes to telecom the various governments still have a large chunk (if not an outright absolute majority) of stock in their former monopolist telcos. And that this is one reason why governments do not feel all that motivated to do something about this problem.

by harryh 10y ago

jacquesm 10y ago

You're missing the point. You are presuming the market is functioning, my point is that if it does not the only losers will be the consumers all else being equal. It is perfectly possible to compete for market share while at the same time colluding on the price of a part of your offering. All the parties competing will come out ahead in that scheme at the expense of the consumers. You can compete on the kind of handsets you offer, your marketing message and the various demographic selectors. You can compete on coverage of the market, availability of the service, quality and so on.

harryh 10y ago
Sprint & T-Mobile both aggressively compete on price.
- nitrogen 10y ago
  They may market based on price, but that doesn't mean that the prices are going down / bandwidth caps going up as fast as they should, or at all.
  - tcoppi 10y ago
    Yeah, and they actually aren't dropping all that much. T-Mobile's prices have gone up the past year or two for new single/two person accounts with the same amount of data. Family prices seem to have dropped slightly but not very much. Sprint's situation is similar.
rayiner 10y ago
He's not. Economic theory tells us that in a market with multiple competitors, collusion is inherently unstable: while in the short run companies may be able to keep it up, in the long run there is a strong incentive to break the collusive pact because whichever company does so will rapidly gain market share at the expense of the others. Your argument to the contrary is based on piling speculation on top of speculation. Not only are we to assume--without evidence--that the carriers are colluding, we must also ignore what we know about T-Mobile's and Sprint's incentives to break the collusion and grab market share because they are, in fact, making tons of money but hiding it through clever accounting. It's not that collusion isn't a possibility in cellular markets in the abstract. It's that it's highly unlikely in a market where one of the alleged colluders is bleeding money and customers and faces bankruptcy.
- jacquesm 10y ago
  You mean: 'without evidence that I'm willing to consider about these specific competitors in this particular market'. But you are willfully ignoring the evidence from all the other competitors in all the other markets doing exactly that. In other words: you are establishing that the competition must be efficient in spite of the fact that the prices for data transfer in your neck of the woods happen to be the same as they are in areas where carriers have already been established to collude. Now I'm really happy that that is the standard that you'd apply to find say a defendant guilty in some court of law, but this is not a court of law and circumstantial evidence is fine by me in the case of multinationals that refuse to open their books to the point where one could establish whether or not their margins are artificially inflated or arrived at in ways that are not kosher. But, since you seem to be very much of the opinion that carriers are entities that deserve a lot of sympathy for their present day miserable situation (rather than that they offer vast amounts of money for spectrum and then overcharge consumers in order to make this money back) I hope you will decide to strike out for the underdog here and to offer your carrier an even larger premium than they are already extracting from you for the data that you use. I find it interesting that you begin the whole discussion on a note of 'everybody will charge what they will' with Apple as the example (of clear graft) and end on the present one, the cognitive dissonance is so strong that I really wonder how carriers have managed to pull the wool so thoroughly over your eyes that you can't see what's going on. You have to commend them for managing this, it's a long time since the break-up of Bell in the US and all the ugliness that has come to light in countries all over the world but to see it so successfully papered over that they could essentially get away with it in broad daylight is interesting to me. If there is one aspect of technology that is rotten to the core when it comes to extracting money for nothing from the populace it is telcos and the industry requires very careful monitoring and the occasional government intervention to stop them from their worst excesses. Any and all appearance to the contrary may safely be interpreted as successful marketing. Note that since it requires a license to operate the market is far from efficient in the present and that in quite a few countries with so-called free markets when it comes to telecom the various governments still have a large chunk (if not an outright absolute majority) of stock in their former monopolist telcos. And that this is one reason why governments do not feel all that motivated to do something about this problem.