3 ms·
Technological barriers mean high profits for existing players. This in turn brings more and more entrepreneurs looking to bypass the barrier (either through new
by warrenwilkinson 16y ago
Technological barriers mean high profits for existing players. This in turn brings more and more entrepreneurs looking to bypass the barrier (either through new technology, capital intensive partnerships, or other avenues) and reach the gold.
- leot 16y agoThe fallacy here is the engagement of "long-run" reasoning, which assumes that market inefficiencies are static long enough for entrepreneurs to overcome the various barriers to entry (the long-run requires an assumption of stationarity). It's an empirical question whether entrepreneurs can reach the gold when it's constantly moving, and whether the economic cost of doing so is less than the cost of some smart regulation.
- warrenwilkinson 16y agoIf the incumbents close the opportunity by offering better service -- than the original parents problem no longer exists. Businesses compete with potential competitors and potential technologies too. The higher the price, the more incentive for your users to look at alternative solutions (which includes starting a competing service). Greater demand for alternatives will be answered.