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True, though I question how effectively a cartel on rents can be formed in practice. I believe that specific piece of software is already being investigated by

True, though I question how effectively a cartel on rents can be formed in practice. I believe that specific piece of software is already being investigated by the Government for anti-competitive, price fixing like behavior

cjbgkagh 4y ago
Effective enough to elicit government investigation. There is a huge industry of data aggregators and managers for which this cartel like emergent behavior is the primary value offering. My current rent is managed by it and I can presume at least 10% rent hike every year. The entrenched money benefits from this status quo so without an establishment threatening crisis I doubt much would be done about it.
- adam_arthur 4y ago
  Rents are declining nominally right now, not rising. If you look at recent MoM data. The software can't just tell companies to raise rents 10% if the market doesn't bear it. It would require a unilateral cartel without meaningful supply outside of that agreement to actually fix prices. That being said, this kind of behavior should be subdued as much as possible, within reason
  - cjbgkagh 4y ago
    They would be declining more without the software, you can still extract monopolistic rents in an economic downturn. Just because the rents have declined does not mean they’re not monopolistic. A lot of this is geographical monopolies and actual liquid stock is often quite limited, so long as price is set at the margin and the managed property is on that margin they can elevate the price. This is easy enough to do as low rent options don’t stay on the market. Plus non-managed properties will benchmark themselves against the market which includes the managed properties allowing for price leadership. There is a whole zoo of anti-competitive behavior strewn through business that is tolerated due to the immense amount of money that is made that is beneficial to governments who tax it and politicians who receive donations. I don’t know how to fix it, step 1 seems to be fix political corruption and that already seems impossible. Once something becomes corrupted it’s very difficult to un-corrupt it.

cjbgkagh 4y ago

Effective enough to elicit government investigation. There is a huge industry of data aggregators and managers for which this cartel like emergent behavior is the primary value offering. My current rent is managed by it and I can presume at least 10% rent hike every year. The entrenched money benefits from this status quo so without an establishment threatening crisis I doubt much would be done about it.

adam_arthur 4y ago
Rents are declining nominally right now, not rising. If you look at recent MoM data. The software can't just tell companies to raise rents 10% if the market doesn't bear it. It would require a unilateral cartel without meaningful supply outside of that agreement to actually fix prices. That being said, this kind of behavior should be subdued as much as possible, within reason
- cjbgkagh 4y ago
  They would be declining more without the software, you can still extract monopolistic rents in an economic downturn. Just because the rents have declined does not mean they’re not monopolistic. A lot of this is geographical monopolies and actual liquid stock is often quite limited, so long as price is set at the margin and the managed property is on that margin they can elevate the price. This is easy enough to do as low rent options don’t stay on the market. Plus non-managed properties will benchmark themselves against the market which includes the managed properties allowing for price leadership. There is a whole zoo of anti-competitive behavior strewn through business that is tolerated due to the immense amount of money that is made that is beneficial to governments who tax it and politicians who receive donations. I don’t know how to fix it, step 1 seems to be fix political corruption and that already seems impossible. Once something becomes corrupted it’s very difficult to un-corrupt it.