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There's 0 evidence of "greedlation". It takes only a minute to think why all these companies decided to collude and raise prices now and why not 5 years ago. Te

There's 0 evidence of "greedlation". It takes only a minute to think why all these companies decided to collude and raise prices now and why not 5 years ago. Ten? Why now? Makes no sense. If they can do it now they would have done it years ago.

mitthrowaway2 3y ago
> It takes only a minute to think why all these companies decided to collude and raise prices now and why not 5 years ago. Ten? Why now? Corporate greed is mathematically synonymous with corporate non-competitiveness. Rather than dismissing this possibility a priori, maybe there are reasons why companies used to be more aggressive with their price competition, but aren't anymore? One possibility that comes to my mind is a concentration of ownership in index funds, possibly interacting with rising interest rates at high stock valuations. If 40% of your voting shares are controlled by a fund manager who also controls 40% of your competitor (as well as the rest of the index), that will be a loud voice on your board pushing against cut-throat competition. He'll tell you, and your competitors across the index, that you all need to get your earnings up to protect your stock price because P/E ratios are falling amidst rising bond yields, and that the way to do this is for the whole index to increase prices until consumption starts to decline, where profits peak, rather than fighting with each other over market share.
cwkoss 3y ago
They are doing it now because people will blame systemic economic factors rather than individual actors. Makes a lot of sense to me.
- Auracle 3y ago
  I don’t see what blame has to do with it. Normally if a package of Oreos suddenly jumped up to $5 from $4, you wouldn’t choose not to purchase it because you “blamed” Nabisco or whoever. You wouldn’t buy it because you’d decide your money could be better spent on another snack. It’s not like competition suddenly stopped existing the last couple of years and of Hydrox could swoop in from the grave and start taking that sweet sweet Oreo money they would.

mitthrowaway2 3y ago

> It takes only a minute to think why all these companies decided to collude and raise prices now and why not 5 years ago. Ten? Why now? Corporate greed is mathematically synonymous with corporate non-competitiveness. Rather than dismissing this possibility a priori, maybe there are reasons why companies used to be more aggressive with their price competition, but aren't anymore? One possibility that comes to my mind is a concentration of ownership in index funds, possibly interacting with rising interest rates at high stock valuations. If 40% of your voting shares are controlled by a fund manager who also controls 40% of your competitor (as well as the rest of the index), that will be a loud voice on your board pushing against cut-throat competition. He'll tell you, and your competitors across the index, that you all need to get your earnings up to protect your stock price because P/E ratios are falling amidst rising bond yields, and that the way to do this is for the whole index to increase prices until consumption starts to decline, where profits peak, rather than fighting with each other over market share.

cwkoss 3y ago

They are doing it now because people will blame systemic economic factors rather than individual actors. Makes a lot of sense to me.

Auracle 3y ago
I don’t see what blame has to do with it. Normally if a package of Oreos suddenly jumped up to $5 from $4, you wouldn’t choose not to purchase it because you “blamed” Nabisco or whoever. You wouldn’t buy it because you’d decide your money could be better spent on another snack. It’s not like competition suddenly stopped existing the last couple of years and of Hydrox could swoop in from the grave and start taking that sweet sweet Oreo money they would.