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Horrible, horrible, horrible analogy. There is so much to say about this but the bottom line is that stocks do not follow price fixing it is more a market equil
by objektif 3y ago
Horrible, horrible, horrible analogy. There is so much to say about this but the bottom line is that stocks do not follow price fixing it is more a market equilibrium. This on the other hand is pure price fixing.
- WalterBright 3y agoIt's just a suggested price. There's no coercion.
- unclebucknasty 3y ago>It's just a suggested price. There's no coercion I think you may be misunderstanding the definition of price fixing.
- WalterBright 3y agoWhat's the coercion here?
- unclebucknasty 3y agoPrice fixing is the result of collusion/collaboration, not of coercion.
- WalterBright 3y agoPrice fixing doesn't work without coercion. Let's say you and I agree to sell cars at the same price. How would that be enforced? What's to stop you from cutting your price to grab some business from me?
- onjectic 3y ago> Price fixing doesn’t work without coercion. https://en.wikipedia.org/wiki/Price_fixing https://en.wikipedia.org/wiki/Price_fixing
- unclebucknasty 3y ago>What's to stop you from cutting your price to grab some business from me? The fact that the parties mutually benefit from their collusion, which is why they sought to price fix in the first place. It's an agreement like any other. Please, just read up on the definition of price fixing. It'll clear these questions up for you.
- WalterBright 3y agoA price fixing agreement is not a contract, because there is no exchange of value. Hence, it is not enforceable and the members will cheat on it, because the incentives are a Prisoner's Dilemma. Read about the PD, it'll help clear things up for you.
- unclebucknasty 3y agoI'm familiar with the prisoner's dilemma. This is not that. In general, I don't find price fixing that difficult a concept to grasp, which makes it challenging for me to break it down any further for you. So, unfortunately, I don't think there's anywhere else to go from here. But, thanks for the discussion.
- WalterBright 2y agoOf course it is the same. Work through the scenarios. It's always advantageous for the cartel member to cheat on the cartel agreement.