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Like almost every single major market where people spend a large percentage of their money on? Are restaurants a monopoly? Obviously not. Cars? There are lo

by stale2002 6y ago

Like almost every single major market where people spend a large percentage of their money on? Are restaurants a monopoly? Obviously not. Cars? There are lots of options for cars grocery stores? There are certain some big players, but the 10 corner stores, target, safeway, and whole foods within 5 blocks of where I live show that it is not a monopoly. MAYBE you could argue geographic monopoly for grocery stores, in certain limited exceptions in a few small towns, but that is not the vast majority of people. Housing? There are 10s (or Hundreds?) of millions of people own their own home, or rent it to others. Clearly That is pretty competitive Lets now pick some random things that I see within eyesight of me. What about refrigerators? There are multiple refrigerator companies. Furniture? Probably a lot of companies make furniture. What about shoes? Clothing? There are lots of clothing companies. And before someone says it, yes I am sure that every example that I gave has some big players in the market. But my main point is that I simply do not consider the existence of some big players in a market, to be anywhere even close to the same thing as a monopoly or similarly non-competitive market. There is a huge gap between those two things. The only major exception to all of these examples, is some of the new tech companies that have significant network effects in winner take all markets. Sure, maybe there is an argument that Google is getting to the point where it almost has a monopoly on ads. But, just looking around my room, and looking at the main things that I buy in my life, which is food, shelter, transportion, and clothing, it seems pretty clear that most of these things have lots of competition, even if there are some big players in these markets. That is unless someone is going to make a silly argument that the only markets that could be considered "competitive" are ones in which there are 10 thousands small businesses of equal size or something.

arcticbull 6y ago
I mean, all of these exist in regulated markets that have antitrust regulations. Mergers simply would not be approved. This is a function of the system working as designed. The trend however is clear. It's extra clear in a market like air travel. Just two decades ago the US domestic airline market was actually competitive until... 1. 2001 saw TWA fold into AA. 2. 2005 saw America West fold into US. 3. 2008 saw ATA fold into SouthWest. 4. 2008 saw Northwest fold into Delta. 4. 2009 saw Midwest fold into Frontier. 5. 2010 saw United fold into Continental to form "United". 6. 2010 saw AirTran fold into SouthWest. 7. 2013 saw US Airways (and by extension America West and TWA) fold into AA. 8. 2016 saw Virgin America fold into Alaska. When the government is asleep at the wheel, consolidation happens. The only reason the Big 4 aren't the Big 3 is because of regulators. Out of your identified markets, the trend towards consolidation is very clear - except where no meaningful economy of scale efficiencies can be realized (such as real estate, or taxis). Cars, for instance, consolidated to such an extent that only 14 car companies control 54 brands [1]. Again the only reason there isn't more consolidation is because of regulators. Fridges are another great example. The market has seen huge quantities of consolidation, and likely the only reason it has hasn't progressed further at this time is because of regulators. [2] You're mistaking the system working for it not being there at all. [1] https://www.visualcapitalist.com/14-companies-control-entire-auto-industry/ https://www.visualcapitalist.com/14-companies-control-entire... [2] http://www.appliance411.com/purchase/make.shtml http://www.appliance411.com/purchase/make.shtml
- stale2002 6y ago
  > It's extra clear in a market like air travel. Sure, that is a market with large amounts of geographic network effects. I already said that markets with large network effects could have competition problems. IE, with air travel, on any given route between two cities, there might only be 1 or two airlines servicing it. So yes, thats a problem. Most things that people spend their money on do not have much network effects, so my original point stands. > to such an extent that only 14 car companies control 54 brands So not a winner take all market then? Got it. I already said that it would be ridiculous to claim that a market would need to have 10,000 companies of equal size, in order to be considered "competitive". So yes, I consider the car market to be fairly competitive, and not one where you only have "no choice". > Fridges are another great example. You just posted a link that shows that there are a bunch of competitors, and that it is not a winner take all market. So I stand by my point that neither cars nor fridges are in any way similar to something like internet service, where someone might only have 1 or 2 choices, or something like the Google ads business, where Google has a huge amount of power in the market that is no way comparable to the fairly competitive car market.
  - arcticbull 6y ago
    I posit these markets only have many players because regulation prevents their consolidation. Cars went from 54 to 14 establishing clear directionality and benefit. It's not going from 14 to 1 only because of laws against further consolidation in the space. Regulators would simply deny their request to consolidate further. Stopping at 14 isn't some magical constant or some natural end state. My point is that the natural direction in each of these markets is consolidation, then at a point it hits a dead stop. Why is consolidation only useful up to a certain threshold? It's not. Regulation steps in and keeps it competitive.
    - stale2002 6y ago
      > only because of laws against further consolidation in the space No, because these markets don't have some huge geographic network effect. The markets are pretty different than something like home internet service. The traditional example being that of water pipes, where there is zero benefit to laying the pipes twice to a house. You should be able to see how a situation where laying the pipes twice to a house is pretty different than a situation where there absolutely could be benefits to another car company being created, to manufacture new cars. > Regulation steps I am not sure how you can claim with with a straight face, that anti-trust laws/regulation is being strongly enforced these days, and that this is the reason why most industries are not turning into monopolies. Anti-trust law isn't really enforced even in obvious cases where it should be enforced these days , and yet I see a world where there is lots of new companies entering markets, and lots of competition, in most markets, despite regulators failing to enforce regulation in the exceptional and rare cases where it should be doing so. It is quite clear that regulation is not stepping in, even in the obvious cases. So no, I do not believe that the non-existent enforcement of regulation is doing anything. Instead, we are living in a world that has lots of competition, despite the fact that the regulators aren't doing anything even in the blatant and exceptional cases where it should, such as in telecom/internet/app stores/ect.

arcticbull 6y ago

I mean, all of these exist in regulated markets that have antitrust regulations. Mergers simply would not be approved. This is a function of the system working as designed. The trend however is clear. It's extra clear in a market like air travel. Just two decades ago the US domestic airline market was actually competitive until... 1. 2001 saw TWA fold into AA. 2. 2005 saw America West fold into US. 3. 2008 saw ATA fold into SouthWest. 4. 2008 saw Northwest fold into Delta. 4. 2009 saw Midwest fold into Frontier. 5. 2010 saw United fold into Continental to form "United". 6. 2010 saw AirTran fold into SouthWest. 7. 2013 saw US Airways (and by extension America West and TWA) fold into AA. 8. 2016 saw Virgin America fold into Alaska. When the government is asleep at the wheel, consolidation happens. The only reason the Big 4 aren't the Big 3 is because of regulators. Out of your identified markets, the trend towards consolidation is very clear - except where no meaningful economy of scale efficiencies can be realized (such as real estate, or taxis). Cars, for instance, consolidated to such an extent that only 14 car companies control 54 brands [1]. Again the only reason there isn't more consolidation is because of regulators. Fridges are another great example. The market has seen huge quantities of consolidation, and likely the only reason it has hasn't progressed further at this time is because of regulators. [2] You're mistaking the system working for it not being there at all. [1] https://www.visualcapitalist.com/14-companies-control-entire-auto-industry/ https://www.visualcapitalist.com/14-companies-control-entire... [2] http://www.appliance411.com/purchase/make.shtml http://www.appliance411.com/purchase/make.shtml

stale2002 6y ago
> It's extra clear in a market like air travel. Sure, that is a market with large amounts of geographic network effects. I already said that markets with large network effects could have competition problems. IE, with air travel, on any given route between two cities, there might only be 1 or two airlines servicing it. So yes, thats a problem. Most things that people spend their money on do not have much network effects, so my original point stands. > to such an extent that only 14 car companies control 54 brands So not a winner take all market then? Got it. I already said that it would be ridiculous to claim that a market would need to have 10,000 companies of equal size, in order to be considered "competitive". So yes, I consider the car market to be fairly competitive, and not one where you only have "no choice". > Fridges are another great example. You just posted a link that shows that there are a bunch of competitors, and that it is not a winner take all market. So I stand by my point that neither cars nor fridges are in any way similar to something like internet service, where someone might only have 1 or 2 choices, or something like the Google ads business, where Google has a huge amount of power in the market that is no way comparable to the fairly competitive car market.
- arcticbull 6y ago
  I posit these markets only have many players because regulation prevents their consolidation. Cars went from 54 to 14 establishing clear directionality and benefit. It's not going from 14 to 1 only because of laws against further consolidation in the space. Regulators would simply deny their request to consolidate further. Stopping at 14 isn't some magical constant or some natural end state. My point is that the natural direction in each of these markets is consolidation, then at a point it hits a dead stop. Why is consolidation only useful up to a certain threshold? It's not. Regulation steps in and keeps it competitive.
  - stale2002 6y ago
    > only because of laws against further consolidation in the space No, because these markets don't have some huge geographic network effect. The markets are pretty different than something like home internet service. The traditional example being that of water pipes, where there is zero benefit to laying the pipes twice to a house. You should be able to see how a situation where laying the pipes twice to a house is pretty different than a situation where there absolutely could be benefits to another car company being created, to manufacture new cars. > Regulation steps I am not sure how you can claim with with a straight face, that anti-trust laws/regulation is being strongly enforced these days, and that this is the reason why most industries are not turning into monopolies. Anti-trust law isn't really enforced even in obvious cases where it should be enforced these days , and yet I see a world where there is lots of new companies entering markets, and lots of competition, in most markets, despite regulators failing to enforce regulation in the exceptional and rare cases where it should be doing so. It is quite clear that regulation is not stepping in, even in the obvious cases. So no, I do not believe that the non-existent enforcement of regulation is doing anything. Instead, we are living in a world that has lots of competition, despite the fact that the regulators aren't doing anything even in the blatant and exceptional cases where it should, such as in telecom/internet/app stores/ect.