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A monopoly can only grow revenue by increasing prices, or by creating new use cases and growing the market. The latter tends to pay off better in the long-run.
by lumost 6y ago
A monopoly can only grow revenue by increasing prices, or by creating new use cases and growing the market. The latter tends to pay off better in the long-run.
Research tends to take a long-time to hit the market, in a dynamic market there is no reason to expect that a company funding open research would get a strong first mover advantage. A monopoly doesn't have this concern, Intel could fund semi-conductor research with decade+ time horizons and still be the first to put it to use.
- bleepblorp 6y agoModern business management doesn't care about the long-term. Research pays off future managers and owners in years, or decades, but increasing prices now pays off now in bonuses and dividends for current managers and owners. Behavior follows incentives.
- scarface74 6y agoI agree with you in general, but I don’t think any of the 5 big tech companies are only concerned about short term profits. Two are run by founders (Facebook, Amazon), two are run by hand picked successors of founders (Apple, Microsoft) and I can never tell what Google is doing. It has been rudderless for over a decade.
- eru 6y agoWhat makes you think that business management doesn't care about the long term? Business management is rumoured to care about share prices. And as we can see in the current stock market, shareholders are long term enough to eg see past the current pandemic. They also managed to see past Tesla's losses or Amazon's slim profitability.