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Actually some counterintuitive results from Industrial Relations (the branch of economics that studies supply-side structure, amongst other things) and Game The
by qubex 9y ago
Actually some counterintuitive results from Industrial Relations (the branch of economics that studies supply-side structure, amongst other things) and Game Theory indicate that competition might be greater between oligopolist firms than between those that exist in situations of perfect competition (mainly because by ”knocking out” an oligopolistic competitor you get a big chunk of market share and thus sales volume and economies of scale, whereas ”knocking out” an anonymous perfect competitor nets you (ideally) an infinitesimal additional market share shared by an infinite number of other competitors).
- simion314 9y agoThe first case is good for the company because it will end up in a monopoly while the people will suffer. IMO competition and free market will not converge to the "best for the people/population" optimum point in all cases, lots of cases will converge to a good for the companies and very bad for the people.
- bryanlarsen 9y agoIf my competitor offers a widget on Amazon for $X and I offer it on Amazon for $X-1, I will capture ~100% of that market and the competitor will capture ~0%. The internet's winner-take-all effect has both benefits and drawbacks for us consumers.
- qubex 9y agoThis is the economically expected outcome iff the lower-priced firm has no production capacity constraints and the products are an undifferentiated commodities to the point that consumers have no decision to make other than price.