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But they won’t be leaving the market, right? Therefore, they expect to make some profit at the expected higher price, and would stand to gain the most if all ot

But they won’t be leaving the market, right? Therefore, they expect to make some profit at the expected higher price, and would stand to gain the most if all others cut production, except for them. This is a classic prisoners’ dilemma, where everyone should defect. If they don’t, it must be due to coordination, either ex- or implicitly. And because anti-trust is civil law, it criminal, the standard of poof is “preponderance of evidence”, i. e. >50%.

wtallis 7y ago
If none or only one manufacturer cut production/restricted expansion, then somebody would be leaving the market. That's how the DRAM market ended up collapsing down to just three players: When margins are too low, the smaller players can no longer afford the investment required to keep pace with technology improvements. A short-term desperate play for market share in conditions where you can't turn a serious profit just means you only get to play the game for one more round unless other business units will cover your loss. This is not an efficient market. Large changes in supply have lead times on the order of years, and demand cannot be accurately predicted that far out. Months-long oversupply and shortage conditions are unavoidable. The costs of entry get significantly higher with each generation. A two generation old NAND fab cannot be operated profitably even after all the construction and R&D costs have been recouped.