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I see how this is illegal when it's using a single centralized platform that everyone implicitly agrees on. However, I have a hypothetical that I'm curious abou
by soerxpso 3y ago
I see how this is illegal when it's using a single centralized platform that everyone implicitly agrees on. However, I have a hypothetical that I'm curious about:
Individually, without speaking, every landlord decides that it's in their best interest to charge the highest (per square foot) price that a nearby property is charging. They also all individually understand that if they leave units vacant instead of undercutting eachother, the market impact in favor of their interests will be sufficiently positive to justify the lost immediate revenue, and they trust (blindly) that no landlords will defect from this prisoner's dilemma. There's no communication at all; they all just understand game theory and have blind trust in their fellow landlords.
This would have the exact same material impact on renters. The only difference is that it's slightly harder to pull off. Is it illegal, and should it be illegal?
- jprete 3y agoLandlords will undercut left and right because the benefits are local while the drawbacks are mostly distributed to competitors.
- mlrtime 3y agoThese examples are covered in high school level economics classes. All it takes is one landlord to have a slightly different concern to change their strategy. They need money fast, so they drop the price to get a tenant, boom competition.