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Sure those are possibilities, but how likely are they in the cases I described? If they were true, we'd expect the opposite trends before regulation: increasing
by ggreer 6y ago
Sure those are possibilities, but how likely are they in the cases I described? If they were true, we'd expect the opposite trends before regulation: increasing freight prices, fewer railroad companies, less competition on routes. But that wasn't the case.
It seems much more likely to me that this was more regulatory capture than benevolent governance. After all, if we assume the railroads wanted to make as much money as possible, why would they welcome a regulatory body? They must have thought that the regulations would help their business.
- pydry 6y agoIIRC the railroads would pretty regularly engage in predatory pricing. It was a primary tactic in killing off or weakening competitors. A bit like Amazon did to diapers.com.
- mschuster91 6y ago> If they were true, we'd expect the opposite trends before regulation: increasing freight prices, fewer railroad companies, less competition on routes. Actually, pre-Coronavirus we regularly saw such effects with Uber and "surge pricing". As soon as an entity has managed dominance in a market and squeezed out competition via VC-subsidized dumping, it will raise prices and the customer service will degrade. For what it's worth this is even valid for entirely "virtual" market spaces. Google, Facebook, Twitter, PayPal and Amazon have no meaningful competition, they've managed to achieve sort-of dominance in their markets, and their customer service is atrocious at best. Amazon is interestingly a bit different because the ones that are getting the crap end of the stick are the third-party vendors who have to fight with co-mingling, AmazonBasics and fraud claims, while the end customers have a pretty decent offering.