4 ms·

Any capital intensive project can become a resistant monopoly for the first mover, who then manipulates pricing to prevent competition.

• nickpp 3y ago
  > who then manipulates pricing to prevent competition How exactly? Reducing profits defeats the purpose of becoming a monopoly, while any sliver of profit is the startup's opportunity. To create a monopoly you need to restrict competition some other way, like through governmental regulation.
  • spiralx 3y ago
    > Reducing profits defeats the purpose of becoming a monopoly, while any sliver of profit is the startup's opportunity. Only if you ignore the concept of loss leaders, or the very act of competing in the market itself by undercutting competitors' prices. Companies are very happy to receive less money in the short term in exchange for guaranteed recurring revenue in the long term, it's only rational after all, and applies as much to a yearly subscription being cheaper than 12 individual monthly subscriptions as it does to established companies accepting reduced revenue in the short term to guarantee their share of the market in the long term. This is all pretty obvious from a basic understanding of how companies work TBH.
    • nickpp 3y ago
      Loss leaders, price dumping and price wars are as old as the world and free markets are perfectly capable to deal with them. Here's how how Dow Chemical fought the German bromine cartel's price dumping at the beginning of the last century: https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_monopoly https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_m... No government intervention necessary.