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You forget the other big competitors. Sun pushed OpenOffice to cut MS's profits from Office Google and MS are pushing into the Cloud to reduce Amazon's influe

You forget the other big competitors. Sun pushed OpenOffice to cut MS's profits from Office Google and MS are pushing into the Cloud to reduce Amazon's influence Amazon is creating its own ad network and offering Twitch to reign in Google Walmart is slowly creating its own global online shopping platform to compete with Amazon Should Amazon ever have no competitor, monopoly regulations would kick in. But usually, all the other big players will make sure that Amazon has enough competition to not be invincible. It's not fun for small players, but they obviously don't care enough to organize and take their products off Amazon. Btw, Amazon does not necessarily have less overhead due to Price's law: [1] >The square root of the number of people in a domain do 50% of the work. Should Amazon expand into every business, they would be so huge that all their efficiencies and more would be eaten up by the overhead. [1]https://brainlid.org/general/2017/11/28/price-law.html https://brainlid.org/general/2017/11/28/price-law.html

MiroF 7y ago
Price's law is of questionable empirical validity, it's more like a useful guideline/urban legend. On the other hand, there is substantial economic research demonstrating the harms of monopolies, including vertical ones. I'm a bit confused. Are you claiming that because of Price's law, Amazon doesn't actually benefit from it's monopoly position?
- toohotatopic 7y ago
  Almost. I think that Amazon cannot hold a monopoly position in all markets because its size would be so big that a smaller competitor could compete. As a consequence, there will be an optimal size where Amazon is serving many markets, most likely the most profitable ones, thus massively benefiting [ * ], but they leave every other market open. Depending on the future, this is not necessarily a bad position because low interest rates could seed plenty of startups which means that competitors could operate below break even points. The question is: will Amazon ever reach that position or will its competitors make sure that all its profitable markets will dry up and its growth will be limited? [*] Actually, not Amazon is profiting because the value of that dominant position would be priced into Amazon shares in advance. Amazon would just execute its dominant position that its investors had foreseen.

MiroF 7y ago

Price's law is of questionable empirical validity, it's more like a useful guideline/urban legend. On the other hand, there is substantial economic research demonstrating the harms of monopolies, including vertical ones. I'm a bit confused. Are you claiming that because of Price's law, Amazon doesn't actually benefit from it's monopoly position?

toohotatopic 7y ago
Almost. I think that Amazon cannot hold a monopoly position in all markets because its size would be so big that a smaller competitor could compete. As a consequence, there will be an optimal size where Amazon is serving many markets, most likely the most profitable ones, thus massively benefiting [ * ], but they leave every other market open. Depending on the future, this is not necessarily a bad position because low interest rates could seed plenty of startups which means that competitors could operate below break even points. The question is: will Amazon ever reach that position or will its competitors make sure that all its profitable markets will dry up and its growth will be limited? [*] Actually, not Amazon is profiting because the value of that dominant position would be priced into Amazon shares in advance. Amazon would just execute its dominant position that its investors had foreseen.