Thanks for sharing your thoughts. I personally don't think there's that much room to move down in the mattress industry because lowering the price is usually t

Thanks for sharing your thoughts. I personally don't think there's that much room to move down in the mattress industry because lowering the price is usually the first thing marketers and SMB's try in order to grow market share (or when the business is struggling). I don't know much about that particular industry but I suspect it was already in a Nash Eq. It would explain why the 'new player' was Casper. Someone who didn't participate in the game but created a new game instead. I strongly agree with your comments about the psychological aspects (and general forms of psychological economic value creation). In the essay, I was referring more to businesses that are pretty much a commodity with very little distinction. It doesn't seem likely to me that the people in the market would be working together to artificially keep the price stable at a particular point. Such a system would be highly unstable since all it takes is 1 person to take advantage of it. If n is small enough, maybe but not if n is sufficiently big. This is essentially what a Nash equilibrium describes; you have a system and then 1 person's greed results in them taking advantage and forcing the other party to respond until you have a stable situation that might be less ideal for the market than what you started with.