3 ms·
> Economies of scale, barriers of entry, and other Econ 101 stuff that privilege large entrenched actors over upstarts. All of those already exist without cart
by hbrn 4y ago
> Economies of scale, barriers of entry, and other Econ 101 stuff that privilege large entrenched actors over upstarts.
All of those already exist without cartels.
> Threatening to stop giving contracts to builders if they work with the competitor
This assumes that pool of builders is somehow limited, but if that's the case, builders have leverage. How exactly do you see this conversation going?
- If you work for our competitor, we won't give you any contracts!
- But he can just hire other builders.
- He can't, you're the only builders in the area.
- Oh. Well then, how about we go work for both you and your competitor, and you have to pay us more. What are you going to do, we're the only builders in the area.
> Threat of social sanctions since many of the people who run these businesses all know each other and play together
There's potentially billions of dollars to chase, but what's stopping you is that this will piss of your golf buddies. Right.
> Buying smaller competitors outright before they defect
You can't just assume you can buy any company. Why don't drug cartels just "buy" each other? Surely it's preferable to non-stop murdering.
- danaris 4y ago> All of those already exist without cartels. Well, sure, but in an environment with a cartel, they will privilege the cartel over other actors in the system. > This assumes that pool of builders is somehow limited And it is. It's limited to the builders who operate within the geographic area the cartel operates in. In general, you're just dismissing these very practical criticisms with more "idealized market theory" that only works when it doesn't have to take real frictions into account, or by just saying what boils down to "nuh-uh".