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Big companies can afford lawyers and lobbyists and they get all the best tax breaks and subsidies. Small companies, not so much. What does that have to do with
by quanticle 10y ago
Big companies can afford lawyers and lobbyists and they get all the best tax breaks and subsidies. Small companies, not so much.
What does that have to do with business-to-business transactions? Microsoft doesn't care about your subsidies. Oracle doesn't care about your tax breaks. All they care about is how many users you can bring or how many zeroes you can put on the contract.
This is actually what should and would happen in a free market.
This sort of coordination problem is actually a classic failure of free markets (it was even covered in my Economics 101 course). Coase's Theorem only applies when transaction and negotiation costs are zero. In any real world scenario where transaction costs are nonzero, you'll see failures like this.
- lkrubner 10y ago"All they care about is how many users you can bring or how many zeroes you can put on the contract." Which is influenced by the subsidies you get. Some industries more than others. The extreme case is the agricultural industry in the USA. Many of the big wheat firms would not exist without the vast subsidies offered by the government. For those firms, Oracle or Microsoft are only talking to you because you've gotten money from the government.
- lkrubner 10y agoWhy was this downvoted? It's a straightforward statement of the facts.
- omouse 10y agoThey not only get subsidies, Microsoft and Oracle get to rely on patents and intellectual "property". They absolutely do care about tax breaks.