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My point is that there can be "effective competition" even if there are zero competitors at the moment; what matters is whether someone could come online and co

My point is that there can be "effective competition" even if there are zero competitors at the moment; what matters is whether someone could come online and compete away the excessive profits The whole point of the network effect, is that there can be more than zero competitors who even have a superior product, and it really doesn't matter.

SilasX 8y ago
But that's my point: it's the network effect (or related lock-in) that determines the monopoly, not the raw marketshare. In fact, you can have "competition" while having all the substance of the monopoly. For example, if there are eight competitors with equal marketshare, but it's impossible for anyone new to enter the market, those eight can easily conspire to charge monopoly profits, despite each one's "small" market share.
- stcredzero 8y ago
  If you have a situation where large swathes of the general public desperately want alternatives, but despair of ever seeing a viable one, then something there stinks like a monopoly.
  - dllthomas 8y ago
    Likely, although "everyone is dissatisfied, but not enough to leave" can also be a result of compromise. If there's value to be had by everyone using the same thing, while everyone wants that one thing to be a little different than what others want, a lot of people will "want alternatives" that they can't really have regardless of how the provider behaves.
    - stcredzero 8y ago
      Likely, although "everyone is dissatisfied, but not enough to leave" can also be a result of compromise. That's a distortion. It's more like, lots of people are dissatisfied, but all of the alternatives are economic/network-effect suicide. It's more like people living and working in the crappy mining town, because the only alternatives are like living as a hobo in the woods.
      - dllthomas 8y ago
        I'm not sure if you're saying that what I'm saying is a distortion of the situation, or that the compromise represents monopolistic distortion of the market. I think the former? If so, that's a much stronger reading than I intended; I wasn't saying "this is what's happening" but rather "this is a thing that happens in general, it may be part of the explanation here, I don't know how to really pick it apart."
  - SilasX 8y ago
    People cant want a lot of things that aren't economically feasible. Toy example: if everyone demands at least $30/pound for some risky kind of coal mining, because it's such a pain to do and they'd rather a) rest or b) do easier work at any lower price ... that doesn't mean coal miners are colluding or that coal mining is a monopoly. In that case, if you want a $29/pound alternative, your desire is economically unrealistic. If there's a single coal miner that does it for $29/pound -- and is thus the most efficient one -- that miner will dominate the (tiny, niche) market. But it would not rightly be called a "monopoly", but "a single provider who is legitimately better and would lose business if he started to falter". Telling me that someone currently dominates a market does not prove monopoly power.
    - stcredzero 8y ago
      The situation is far more like not being able to choose another broadband provider, with network effects taking the place of local cable regulations. I can picture a scenario where some sites have an insurmountable advantage because of compromised network neutrality. I'm very sure that in that case, the winners would be crowing about how, "the market has spoken," when the reality is that the market is broken.
      - SilasX 8y ago
        And yes, a broadband (often) would be an example of a monopoly provider. My point was that, "gosh, we want a better alternative" is not necessarily a reasonable desire or evidence of monopoly power.
        stcredzero 8y ago
        "Gosh, we want a better alternative, but alternatives keep on getting squashed," is a pretty strong indicator. Doesn't every monopoly claim that the situation is due to market forces and that they're not a monopoly?

SilasX 8y ago

But that's my point: it's the network effect (or related lock-in) that determines the monopoly, not the raw marketshare. In fact, you can have "competition" while having all the substance of the monopoly. For example, if there are eight competitors with equal marketshare, but it's impossible for anyone new to enter the market, those eight can easily conspire to charge monopoly profits, despite each one's "small" market share.

stcredzero 8y ago
If you have a situation where large swathes of the general public desperately want alternatives, but despair of ever seeing a viable one, then something there stinks like a monopoly.
- dllthomas 8y ago
  Likely, although "everyone is dissatisfied, but not enough to leave" can also be a result of compromise. If there's value to be had by everyone using the same thing, while everyone wants that one thing to be a little different than what others want, a lot of people will "want alternatives" that they can't really have regardless of how the provider behaves.
  - stcredzero 8y ago
    Likely, although "everyone is dissatisfied, but not enough to leave" can also be a result of compromise. That's a distortion. It's more like, lots of people are dissatisfied, but all of the alternatives are economic/network-effect suicide. It's more like people living and working in the crappy mining town, because the only alternatives are like living as a hobo in the woods.
    - dllthomas 8y ago
      I'm not sure if you're saying that what I'm saying is a distortion of the situation, or that the compromise represents monopolistic distortion of the market. I think the former? If so, that's a much stronger reading than I intended; I wasn't saying "this is what's happening" but rather "this is a thing that happens in general, it may be part of the explanation here, I don't know how to really pick it apart."
- SilasX 8y ago
  People cant want a lot of things that aren't economically feasible. Toy example: if everyone demands at least $30/pound for some risky kind of coal mining, because it's such a pain to do and they'd rather a) rest or b) do easier work at any lower price ... that doesn't mean coal miners are colluding or that coal mining is a monopoly. In that case, if you want a $29/pound alternative, your desire is economically unrealistic. If there's a single coal miner that does it for $29/pound -- and is thus the most efficient one -- that miner will dominate the (tiny, niche) market. But it would not rightly be called a "monopoly", but "a single provider who is legitimately better and would lose business if he started to falter". Telling me that someone currently dominates a market does not prove monopoly power.
  - stcredzero 8y ago
    The situation is far more like not being able to choose another broadband provider, with network effects taking the place of local cable regulations. I can picture a scenario where some sites have an insurmountable advantage because of compromised network neutrality. I'm very sure that in that case, the winners would be crowing about how, "the market has spoken," when the reality is that the market is broken.
    - SilasX 8y ago
      And yes, a broadband (often) would be an example of a monopoly provider. My point was that, "gosh, we want a better alternative" is not necessarily a reasonable desire or evidence of monopoly power.
      - stcredzero 8y ago
        "Gosh, we want a better alternative, but alternatives keep on getting squashed," is a pretty strong indicator. Doesn't every monopoly claim that the situation is due to market forces and that they're not a monopoly?