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Highly fragmented markets are also bad for price discovery - so how do we know what size to have?
by RandomLensman 3y ago
Highly fragmented markets are also bad for price discovery - so how do we know what size to have?
- klysm 3y agoWe are so incredibly far from highly fragmented I don’t think that’s even worth thinking about at this stage
- RandomLensman 3y agoIf you don't think about it, could create a weird set of local/product/etc. monopoly like things instead. Not thinking about isn't an option because it ignores the incentives if you force limit sizes.
- klysm 3y agoYes definitely agree a hard limit on sizes doesn’t make sense, but I just think it’s not going to be a problem any time soon with the current state of affairs in the US economy.
- RandomLensman 3y agoI honestly think that this is underestimating how good companies can get in optimization their positions. The smaller companies would inherit these abilities from their "parents".
- tonyedgecombe 3y agoI read an economics paper a while back that said you need at least four players to get a competitive market. I’m not sure how you would translate that to limits on the size of a company though as every sector would be different.
- RandomLensman 3y agoI think we need to seriously think about market design at some point. Relying on more actors alone is not a great strategy.
- mschuster91 3y agoAt the very least a line can be drawn when a company cross-subsidizes a barely profitable enterprise to the tune that they're drowning out competitors, or when they exploit workers so absurdly insane that they're forced to resort to piss in bottles because the algorithm penalizes them for taking a civilized bathroom break. AWS makes boatloads of money on AWS and uses that to stay afloat with shipping stuff.