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So they used a super-secret algorithm to… raise prices? That’s all? When you’re the leader in your category, it’s quite obvious that competitors are aligned on

• phkahler 3y ago
  >> At a previous company our main competitor fixed most of its prices to 1 cent below ours, so when we raised the prices they followed us as well. So theoretically if you both raised prices too much arbitrarily, a third player might enter the market at a lower price. How realistic is that? I think any newcomer would be well aware of your ability to lower prices to compete, and a new player probably has costs just to enter the game so it'd be a bit risky.
  • hk__2 3y ago
    > So theoretically if you both raised prices too much arbitrarily, a third player might enter the market at a lower price. How realistic is that? I think any newcomer would be well aware of your ability to lower prices to compete, and a new player probably has costs just to enter the game so it'd be a bit risky. In this particular situation it was not realistic because 1- the pricing was not arbitrary and 2- it was a highly-competitive market in which the prices were so low that any new player wouldn’t have been able to enter the market because you needed high volume to start earning some margin.