3 ms·
Where goods and services are not commodified, people are unwilling to pay switching costs ("so much is uncertain, why increase uncertainty when I don't need to?
by solatic 3y ago
Where goods and services are not commodified, people are unwilling to pay switching costs ("so much is uncertain, why increase uncertainty when I don't need to?"), so long as price differences are not "too large". This implicitly puts a floor on prices as producers hold onto their customer bases and slowly raise prices on newcomers.
Where goods and services are commodified, the commodities have largely (at least in the US) been captured by oligopolies that implicitly understand that they should keep prices high, no direct collusion required. New entrants to the commodified markets (who would produce the commodities at lower prices) are nowhere to be found, as markets are highly regulated with high barriers to entry.
Break up the oligopolies and encourage entrepreneurship.