4 ms·
> Price fixing ensures higher rent for the whole cartel (which is comprised of their customers) Price fixing ensures higher profits for the entire market, not
by Aunche 4y ago
> Price fixing ensures higher rent for the whole cartel (which is comprised of their customers)
Price fixing ensures higher profits for the entire market, not just the cartels. Those outside the cartel equally benefit from the price fixing as cartel members, but that no pressure to constrain supply, which puts them in a strictly better position. For example, OPEC enabled the fracking industry and when OPEC loosened their price fixing, in 2019, many of these companies went bankrupt.
> What Realpage gains from creating a cartel is a really sticky customer base.
So that's why they allegedly threaten to fire their customers when they don't follow their pricing recommendation? It would make much more sense to simply offer the best pricing product.
- HDThoreaun 4y agoTragedy of the commons is a problem cartels face, that doesn't mean the cartels aren't providing value though. Sure some will defect, but everyone in the cartel is still better off than the otherwise would be.
- Aunche 4y ago> Tragedy of the commons is a problem cartels face, That's my point. If RealPage were creating a cartel, they would be creating themselves problems without any upside. They aren't receiving the rent. They're receiving money from landlords who are happy with their pricing model. The fact the RealPage does not seem to experience the same problems common to cartels suggests that they aren't facilitating a cartel.
- HDThoreaun 4y agoSigning up for the service gives the members immediate access to the price the cartel is setting. Defecters have to wait for the market to react to RealPages updates, so there is a disadvantage to defecting. Even if there wasn't, the biggest landlords would want to join the cartel because they know that fixing prices makes them richer, even if some of the value the cartel creates isn't captured.