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> given economies of scale and/or network effects. Other than competition, easily bought out when you're working with a $600 billion valuation of Amazon, or lo
by charwalker 5y ago
> given economies of scale and/or network effects.
Other than competition, easily bought out when you're working with a $600 billion valuation of Amazon, or loss of consumer interest, what incentive does a for profit company have to shift any gains from economies of scale/etc to consumers? Why not make your product for 10% less, charge the same, and pass on the difference to shareholders?
Apple is a great example. If they buy out the group making the M1 to reduce cost and improve supply chain efficiency, what incentive is there to lower prices especially for a company whose marketed image is all about premium? That money is going right into ongoing costs or to recoup the initial merger costs.
Any improvement to consumers are either hypothetical, relate directly to fending off competition, listed as bullets on a PowerPoint slide between VPs, or carefully constructed to pass regulatory questions, not to help their customers save money.
- kingsuper20 5y ago>what incentive does a for profit company have to shift any gains from economies of scale/etc to consumers? You'd have to have listen in to a Walmart upper management meeting to see why, but my guess is that all commerce is somewhat fungible. There's always a bit more growth to be eked by lowering prices or increasing value of products. I'm not saying that this always happens, or that it isn't shared with increasing profits. Gigantism in box stores could be used in areas for monopoly pricing where they have wiped out smaller competitors (who themselves wiped out smaller competitors) but there are numerous cases where it hasn't happened. I'd say that fear of anti-trust action is only part of the reason.