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Haha, that's such an easy way to get around this thing. I'd just set up an LLC called "Price Advisor LLC" and instead of a cartel, we'd all just go to Price Adv

Haha, that's such an easy way to get around this thing. I'd just set up an LLC called "Price Advisor LLC" and instead of a cartel, we'd all just go to Price Advisor LLC and ask "what should I set it at?" and then Price Advisor LLC can just run the cartel. This is hilarious. I can enable full anti-trust myself out of a one-man LLC by just "using comparables".

sokoloff 3y ago
Isn’t this what happens every trading day for Apple stock (and others)? I couldn’t begin to hazard a guess as to what a share of Apple “should be” worth, but if I do a little electronic research, I now have the advice that “around $190/share” is probably right. Did I collude just there?
- bobthepanda 3y ago
  there is a difference between doing research when selling vs. asking a company for advice and being required to take their price at least 80% of the time. there is also the issue of market concentration. generally speaking in a regular, healthy market many people hold stock and possibly undercut each other. In financial cases where there is actual price fixing going on (e.g. LIBOR) there has been a lot of prosecution.
- brasic 3y ago
  The research you do in that scenario would just tell you the prices which shares had actually changed hands at. A decentralized market-based price discovery mechanism cannot be considered collusion or price fixing, since it’s exactly the opposite.
- renewiltord 3y ago
  No, because it's decentralized. The Price Advisor LLC is sort of important there. e.g. take a cartel that you genuinely think is a cartel. Now instead of them all colluding, imagine that they set up Price Advisor LLC, and that no two of them ever talk to each other to set prices. All price setting is done by Price Advisor LLC. Moving the price setting into this LLC does not make the operation not a cartel. The LLC saying it's "checking comparables" does not make it not a cartel. After all, if a legitimate cartel could dodge this by just making a new LLC, then it would almost always make sense to cartelize because you can always act as a cartel without being considered a cartel for the cost of $500.
twoodfin 3y ago
Cartels don’t work without an enforcement mechanism to punish defectors. Otherwise you’d be crazy not to lower your rents by 10% and make it up on volume. This is obviously true in many markets where price discovery is easier: Mobile network operators don’t need a service to report on their competitors’ pricing. They know it and somehow a cartel fails to form.
- _AzMoo 3y ago
  You can't make it up on volume, your product isn't elastic enough. There's only so many properties that you can own, and financing right now for both construction and acquisition is incredibly difficult. The only viable way for property managers to grow at the moment is to increase their margins for the same product, which as you're likely aware, means either decreasing their costs or increasing their prices. They are doing both.
  - HDThoreaun 3y ago
    If they’re not withholding supply they’re not colluding. They’re just charging the market price. Cartels only work if they’re able to lower supply.
    - _AzMoo 3y ago
      They can lower supply by leaving units empty.
      - HDThoreaun 3y ago
        are they?
        _AzMoo 3y ago
        Yes they are, it's common in the industry. Source: I work for a RealPage competitor.
fallingknife 3y ago
It's not easy because it would never work. Landlords would be incentivised to lower their rent below the cartel level to achieve 100% occupancy. Cartels need an enforcement mechanism to work.
- anigbrowl 3y ago
  Landlords don't care about 100% occupancy if they are making sufficient profit per unit; the rent isn't constrained to some fixed premium over the mortgage & tax costs. They can just leave some construction material in the empty units and make up some expenses. Have you never dealt with a landlord that invented BS reasons not to return a deposit?
  - HDThoreaun 3y ago
    Is there any evidence that real page lowered occupancy rates?

sokoloff 3y ago

Isn’t this what happens every trading day for Apple stock (and others)? I couldn’t begin to hazard a guess as to what a share of Apple “should be” worth, but if I do a little electronic research, I now have the advice that “around $190/share” is probably right. Did I collude just there?

bobthepanda 3y ago
there is a difference between doing research when selling vs. asking a company for advice and being required to take their price at least 80% of the time. there is also the issue of market concentration. generally speaking in a regular, healthy market many people hold stock and possibly undercut each other. In financial cases where there is actual price fixing going on (e.g. LIBOR) there has been a lot of prosecution.
brasic 3y ago
The research you do in that scenario would just tell you the prices which shares had actually changed hands at. A decentralized market-based price discovery mechanism cannot be considered collusion or price fixing, since it’s exactly the opposite.
renewiltord 3y ago
No, because it's decentralized. The Price Advisor LLC is sort of important there. e.g. take a cartel that you genuinely think is a cartel. Now instead of them all colluding, imagine that they set up Price Advisor LLC, and that no two of them ever talk to each other to set prices. All price setting is done by Price Advisor LLC. Moving the price setting into this LLC does not make the operation not a cartel. The LLC saying it's "checking comparables" does not make it not a cartel. After all, if a legitimate cartel could dodge this by just making a new LLC, then it would almost always make sense to cartelize because you can always act as a cartel without being considered a cartel for the cost of $500.

twoodfin 3y ago

Cartels don’t work without an enforcement mechanism to punish defectors. Otherwise you’d be crazy not to lower your rents by 10% and make it up on volume. This is obviously true in many markets where price discovery is easier: Mobile network operators don’t need a service to report on their competitors’ pricing. They know it and somehow a cartel fails to form.

_AzMoo 3y ago
You can't make it up on volume, your product isn't elastic enough. There's only so many properties that you can own, and financing right now for both construction and acquisition is incredibly difficult. The only viable way for property managers to grow at the moment is to increase their margins for the same product, which as you're likely aware, means either decreasing their costs or increasing their prices. They are doing both.
- HDThoreaun 3y ago
  If they’re not withholding supply they’re not colluding. They’re just charging the market price. Cartels only work if they’re able to lower supply.
  - _AzMoo 3y ago
    They can lower supply by leaving units empty.
    - HDThoreaun 3y ago
      are they?
      - _AzMoo 3y ago
        Yes they are, it's common in the industry. Source: I work for a RealPage competitor.

fallingknife 3y ago

It's not easy because it would never work. Landlords would be incentivised to lower their rent below the cartel level to achieve 100% occupancy. Cartels need an enforcement mechanism to work.

anigbrowl 3y ago
Landlords don't care about 100% occupancy if they are making sufficient profit per unit; the rent isn't constrained to some fixed premium over the mortgage & tax costs. They can just leave some construction material in the empty units and make up some expenses. Have you never dealt with a landlord that invented BS reasons not to return a deposit?
- HDThoreaun 3y ago
  Is there any evidence that real page lowered occupancy rates?