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Well, you have to come up with a reason for why now -- the profit motive has been there forever. There's also a question of why high margins don't induce new e

Well, you have to come up with a reason for why now -- the profit motive has been there forever. There's also a question of why high margins don't induce new entrants to these markets, or why consumers responding too cleanly to higher prices by buying less. There's been a variety of factors at play and I think if you want to pin it on profits you gotta put in the legwork to rule out or at least quantify the dozens of other factors. And like, if Nintendo wants to charge an extra ten dollars for Zelda[1], I don't think thats any kind of call for EU/UK regulators to step in. [1]: https://www.gamesradar.com/zelda-tears-of-the-kingdom-is-getting-partial-blame-for-the-uks-record-inflation/ https://www.gamesradar.com/zelda-tears-of-the-kingdom-is-get...

alexaholic 3y ago
https://news.ycombinator.com/item?id=36484267 https://news.ycombinator.com/item?id=36484267 > I suspect what happened was rising prices because of the pandemic and the war showed companies they can increase prices without also suffering a significant decrease in sales. After all, when virtually all prices are going up, where are consumers going to go?
- jldugger 3y ago
  I'm not disputing that's what is happening, but I do find it interesting _why_ its happening. Consider a scenario where consumer demand for your product jumps rapidly. The two normal profit maximizing responses are to raise prices and increase output. Ideally do both. On the Odd Lots podcast, it's been discussed in various markets that companies that survived 2008 learned to avoid large capital investments when their competitors all went out of business chasing market share. And if market incumbents are all too afraid of making large, long term investments right now, output can only go up after new entrants to the market appear. The online discourse seems to favor cigars and shady board rooms, but it seems just as likely to be risk aversion.
asdff 3y ago
Its hard to enter a market as a truly novel competitor. Chances are on your way up you run into some essential sources that are controlled by a competitor. Imagine starting a Peach computer company in your garage today. You think Broadcom will want to potentially sour their relationship with Apple by offering you good terms? There's a reason why a lot of these "pulled myself up by the bootstraps" stories happened in eras where you could comfortably rent a workshop with little means and do things like solder your circuitry for a desktop computer by hand and ship it to clients yourself. A lot of such windows of opportunity were open for a few short years or even decades but have long since been shut and bricked over.
- jldugger 3y ago
  > There's a reason why a lot of these "pulled myself up by the bootstraps" stories happened in eras where you could comfortably rent a workshop with little means and do things like solder your circuitry for a desktop computer by hand and ship it to clients yourself. If only there was a discussion forum that could match up founders with venture capitalists ready to take on big challenges! You have picked perhaps the worst example industry, on perhaps the worst venue to write it.

alexaholic 3y ago

https://news.ycombinator.com/item?id=36484267 https://news.ycombinator.com/item?id=36484267 > I suspect what happened was rising prices because of the pandemic and the war showed companies they can increase prices without also suffering a significant decrease in sales. After all, when virtually all prices are going up, where are consumers going to go?

jldugger 3y ago
I'm not disputing that's what is happening, but I do find it interesting _why_ its happening. Consider a scenario where consumer demand for your product jumps rapidly. The two normal profit maximizing responses are to raise prices and increase output. Ideally do both. On the Odd Lots podcast, it's been discussed in various markets that companies that survived 2008 learned to avoid large capital investments when their competitors all went out of business chasing market share. And if market incumbents are all too afraid of making large, long term investments right now, output can only go up after new entrants to the market appear. The online discourse seems to favor cigars and shady board rooms, but it seems just as likely to be risk aversion.

asdff 3y ago

Its hard to enter a market as a truly novel competitor. Chances are on your way up you run into some essential sources that are controlled by a competitor. Imagine starting a Peach computer company in your garage today. You think Broadcom will want to potentially sour their relationship with Apple by offering you good terms? There's a reason why a lot of these "pulled myself up by the bootstraps" stories happened in eras where you could comfortably rent a workshop with little means and do things like solder your circuitry for a desktop computer by hand and ship it to clients yourself. A lot of such windows of opportunity were open for a few short years or even decades but have long since been shut and bricked over.

jldugger 3y ago
> There's a reason why a lot of these "pulled myself up by the bootstraps" stories happened in eras where you could comfortably rent a workshop with little means and do things like solder your circuitry for a desktop computer by hand and ship it to clients yourself. If only there was a discussion forum that could match up founders with venture capitalists ready to take on big challenges! You have picked perhaps the worst example industry, on perhaps the worst venue to write it.