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Also captured in the price signal. The higher price (in your example created via price collusion) is a signal to competitors to enter the market.
by gwright 9y ago
Also captured in the price signal. The higher price (in your example created via price collusion) is a signal to competitors to enter the market.
- charleslmunger 9y agoNot really, because the price increase sint actually due to real costs on Seagate/wd's side - everyone knows they will just drop prices if a competitor joins that's not part of the collusion. You'd be entering a market with huge startup costs, and once you'd ramped up production prices would drop and your margins would be razor thin.
- londons_explore 9y agoThe hard drive market is widely believed to die with the advent in solid state disks. With a huge capital cost to get into the market, no investor will put money into building new hard drive factories when it will probably be obsolete in 5 years.
- tw04 9y agoBecause you can just hop right into the HDD market? Are we pretending it wouldn't take tens of billions of dollars, 5+ years, and patents nobody is willing to sell or license?