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How is that predatory pricing? Landlords aren't driving alternative landlords out of business by dropping their prices too low for others with shallower pockets
by scarejunba 7y ago
How is that predatory pricing? Landlords aren't driving alternative landlords out of business by dropping their prices too low for others with shallower pockets to compete.
- solidsnack9000 7y agoYou are correct, and I am incorrect. Predatory pricing, also known as undercutting, is a pricing strategy in which a product or service is set at a very low price with the intention to achieve new customers (Loss leader), or driving competitors out of the market or to create barriers to entry for potential new competitors. https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing I should have called it "price gouging" or perhaps "profiteering". https://en.wikipedia.org/wiki/Price_gouging https://en.wikipedia.org/wiki/Price_gouging There isn't really a great word for long-term exploitation of an easy structural advantage, though. Landlords don't have to form a cartel, since (a) everyone has to buy from them, (b) land is limited in supply and (c) the barrier to entry is high. Maybe it's a "natural cartel".
- scarejunba 7y agoFair enough. I believe they call that behaviour "rent-seeking" (in the Adam Smith sense) https://en.m.wikipedia.org/wiki/Rent-seeking#Description https://en.m.wikipedia.org/wiki/Rent-seeking#Description Most of the value of the land is from work done not by the property owner, which is just an interesting situation.