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> Payday lenders, by contrast, operate in a market with immense amounts of competition. There’s one on every block in most places. This is very peculiar reason
by thaumaturgy 8y ago
> Payday lenders, by contrast, operate in a market with immense amounts of competition. There’s one on every block in most places.
This is very peculiar reasoning. Why did you go with, "payday lenders must be struggling to provide crucial services because there's one on every block", instead of, "there are payday lenders on every block because it's a stupidly profitable business"?
- rayiner 8y agoBecause that’s literally the opposite of how the world works? There are Chinese restaurants all over the place. Does that mean they’re wildly profitable? There are a lot of payday lending places because there is a lot of demand for them. And because there are so many, competition drives rates down to the efficient amount. There’s lots of places where I’m not going to trust economic theory reflects reality. But this is an example of microeconomics out of a textbook.