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This is a unnecessorily long article where the central message gets lost. My understanding is that there were two major insulin manufacturers and in past, they
by sytelus 7y ago
This is a unnecessorily long article where the central message gets lost. My understanding is that there were two major insulin manufacturers and in past, they competed which kept prices down. Then suddenly they realized that if they stop wasting their resources in competing and instead cooperate then they can get arbitrarily high profits. With this internal understanding, one would raise the price and soon other would match that high price. They did this over and over to their great surprise that customers are just eating up the higher cost. This was the much better and shorter path to huge profits!
I have a general theory that in any two-party system where rewards are potentially unlimited and at the expense of someone else, the parties would sooner or later learn that its better to cooperate instead of competing. We have seen this movie in cable industry, cell phone industry and so on. I expect this to happen also in political parties in US, UK and elsewhere. In those scenarios, parties will soon learn that if they cooperate then they can acquire unlimited power, funds and control at the expense of resources (i.e. people) and divide these spoils between themselves which will be much higher than if they tried to compete with each other.