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If all apps go on strike, an app that crosses the picket line gets all the revenue in their market. This is related to the economic term "cartel", and why they

If all apps go on strike, an app that crosses the picket line gets all the revenue in their market. This is related to the economic term "cartel", and why they are unstable in practice.

Iolaum 5y ago
in practice? Instead of posting anecdotal evidence of mine to the contrary, I ll ask the following. If cartels are unstable in practice, then why do states need competition authorities to punish price fixing, and similar practices? I 'd say cartel's are unstable in theory but not necessarily in practice.
- AtlasBarfed 5y ago
  Yeah, I would argue that almost every market/segment in America is dominated by a cartel or monopoly. Even things like commodities have hidden cartels and monopolies. Oil may be a commodity, but the refining facilities are most certainly cartel-owned. Agriculture is seemingly not a cartel, but ADM and Cargill dominate certain aspects of the supply chain and processing. Instead I would argue that iterative game theory of free market economics would stabilize to a cartel or monopoly. Once one of the open competitors determines an advantage, and/or has substantial access to near-free capital (um, what's the interest rate of the last two decades?), then they can acquire their competitors. Then they can apply barriers to entry such as regulation and lockin contracts with equipment suppliers and the like. Look at the practices of Intel to lockout AMD. Look at how Microsoft exerted power on PC makers. Once you are big, you can influence the suppliers and distributors to lockout competitors. As long as size is an intimidator (and it almost always will be except to extreme examples of markets), it will be effective. The only time it helps is when it slows response until an upstart using an entirely different supply chain and technology (like Tesla) gains such a fundamental advantage they can't stamp it out.

If all apps go on strike, an app that crosses the picket line gets all the revenue in their market. This is related to the economic term "cartel", and why they are unstable in practice.

Iolaum 5y ago

in practice? Instead of posting anecdotal evidence of mine to the contrary, I ll ask the following. If cartels are unstable in practice, then why do states need competition authorities to punish price fixing, and similar practices? I 'd say cartel's are unstable in theory but not necessarily in practice.

AtlasBarfed 5y ago
Yeah, I would argue that almost every market/segment in America is dominated by a cartel or monopoly. Even things like commodities have hidden cartels and monopolies. Oil may be a commodity, but the refining facilities are most certainly cartel-owned. Agriculture is seemingly not a cartel, but ADM and Cargill dominate certain aspects of the supply chain and processing. Instead I would argue that iterative game theory of free market economics would stabilize to a cartel or monopoly. Once one of the open competitors determines an advantage, and/or has substantial access to near-free capital (um, what's the interest rate of the last two decades?), then they can acquire their competitors. Then they can apply barriers to entry such as regulation and lockin contracts with equipment suppliers and the like. Look at the practices of Intel to lockout AMD. Look at how Microsoft exerted power on PC makers. Once you are big, you can influence the suppliers and distributors to lockout competitors. As long as size is an intimidator (and it almost always will be except to extreme examples of markets), it will be effective. The only time it helps is when it slows response until an upstart using an entirely different supply chain and technology (like Tesla) gains such a fundamental advantage they can't stamp it out.