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> I think the most effective argument against Wansley and Weinstein is that the markets may reset after the companies involved collapse The point they are maki
by pyrale 3y ago
> I think the most effective argument against Wansley and Weinstein is that the markets may reset after the companies involved collapse
The point they are making is that even if the companies fail to corner the market, the VCs can (and do) exit with a profit before the collapse. Therefore, predatory pricing is a profitable strategy for some actors. This line of argument essentially defeats the claim that losses needs to be recouped for the strategy to be profitable, and therefore, is rare [1], as the FTC claims:
> This strategy can only be successful if the short-run losses from pricing below cost will be made up for by much higher prices over a longer period of time after competitors leave the market.
[1]: https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost-pricing https://www.ftc.gov/advice-guidance/competition-guidance/gui...