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> If a company is able to price a product above their competitors and still succeed (e.g. by investing more in marketing), that's legal too. Yes, but it also r

> If a company is able to price a product above their competitors and still succeed (e.g. by investing more in marketing), that's legal too. Yes, but it also runs counter to the idea that free markets tend to drive prices down through competition. In reality, 1 of 2 things happens: a) companies try to differentiate their products enough to not be direct competitors (e.g. exclusive content on streaming platforms, or platform lock-in), and both/all charge more b) one company buys the other to kill their competition No one actually lowers their prices to compete anymore, because we abandoned enforcing anti-trust and anti-monopoly laws decades ago.

bogwog 2y ago
Sorry, but that is nonsense and I have no idea what point you're trying to make. You're saying that competition doesn't drive down prices by giving two examples of how companies avoid competition.
- ToucanLoucan 2y ago
  > You're saying that competition doesn't drive down prices by giving two examples of how companies avoid competition. The point is that the intuitive wisdom that free market competition lowers prices of goods is not now, nor has it ever been the truism that it's postured as, because the businesses within that market have a huge selection of tools and strategies at their disposal to avoid direct competition. And this makes sense. Why in the world would you subject your business to the unmediated competition of a free market? Yeah, it's totally possible for you to create a product so innately better that you own the market by virtue of that, but that's like... hard. It's way easier to create brand-lock-in to incentivize your existing customers to stay in your "ecosystem," or to create an innovative unique feature and patent it so your competition can't use it, or use snobby/elitist marketing to make your product more enticing to people who seek status, or shit, go the other way, make it humble and down to earth, and appeal to a sense of "genuineness," or tie yourself to patriotism and put flags all over your product, whatever it might be. There's tons of ways you can make people want your thing that have fuck-all to do with the thing. I think this is a serious fault in how pro-free-market people tend to think, which is this constant positioning of people as rational actors who will choose the best product for their needs, and it's utter nonsense. People buy stuff for stupid reasons constantly.
colonCapitalDee 2y ago
No, your time horizon is too short. Prices go up in the short term, which increases profits, which incentivizes competition, which brings prices down in the long term. A few years of increased prices is worth increased efficiency over decades. Prices are going in most industries, US markets are generally quite competitive.
- Miraste 2y ago
  Increasing profits often doesn't incentivize competition, especially when barriers to entry are high. Instead, it decreases competition by giving existing corporations even more money and power to use against newcomers. Look at what happened to Bandcamp: bought up by a music licensing company and gutted.
- ClumsyPilot 2y ago
  > which increases profits, which incentivizes competition This is a fantasy. Give two examples of major markets where competition has increased recently. The US economy has grown what, 4 times since 1990’s but the number of registered companies has fallen by half.
  - AgentOrange1234 2y ago
    Does the sheer number of companies correlate with competition? I can imagine simple hypotheticals like: A. Two companies that compete with one another in each of markets 1, 2, and 3. B. Three companies, each with a monopoly on a single market. I know nothing.
- ang_cire 2y ago
  Increasing profits just enables attacking competitors in other ways than via product competition. The narrative that profits get turned into RnD instead of executive bonuses and stock buybacks or acquisitions is a Econ 101 fantasy. In the real world, Cisco, Meta, Amazon, and Microsoft don't make better products to win, they just buy Splunk, Insta, Whole Foods, and Bethesda.
- ang_cire 2y ago

bogwog 2y ago

Sorry, but that is nonsense and I have no idea what point you're trying to make. You're saying that competition doesn't drive down prices by giving two examples of how companies avoid competition.

ToucanLoucan 2y ago
> You're saying that competition doesn't drive down prices by giving two examples of how companies avoid competition. The point is that the intuitive wisdom that free market competition lowers prices of goods is not now, nor has it ever been the truism that it's postured as, because the businesses within that market have a huge selection of tools and strategies at their disposal to avoid direct competition. And this makes sense. Why in the world would you subject your business to the unmediated competition of a free market? Yeah, it's totally possible for you to create a product so innately better that you own the market by virtue of that, but that's like... hard. It's way easier to create brand-lock-in to incentivize your existing customers to stay in your "ecosystem," or to create an innovative unique feature and patent it so your competition can't use it, or use snobby/elitist marketing to make your product more enticing to people who seek status, or shit, go the other way, make it humble and down to earth, and appeal to a sense of "genuineness," or tie yourself to patriotism and put flags all over your product, whatever it might be. There's tons of ways you can make people want your thing that have fuck-all to do with the thing. I think this is a serious fault in how pro-free-market people tend to think, which is this constant positioning of people as rational actors who will choose the best product for their needs, and it's utter nonsense. People buy stuff for stupid reasons constantly.

colonCapitalDee 2y ago

No, your time horizon is too short. Prices go up in the short term, which increases profits, which incentivizes competition, which brings prices down in the long term. A few years of increased prices is worth increased efficiency over decades. Prices are going in most industries, US markets are generally quite competitive.

Miraste 2y ago
Increasing profits often doesn't incentivize competition, especially when barriers to entry are high. Instead, it decreases competition by giving existing corporations even more money and power to use against newcomers. Look at what happened to Bandcamp: bought up by a music licensing company and gutted.
ClumsyPilot 2y ago
> which increases profits, which incentivizes competition This is a fantasy. Give two examples of major markets where competition has increased recently. The US economy has grown what, 4 times since 1990’s but the number of registered companies has fallen by half.
- AgentOrange1234 2y ago
  Does the sheer number of companies correlate with competition? I can imagine simple hypotheticals like: A. Two companies that compete with one another in each of markets 1, 2, and 3. B. Three companies, each with a monopoly on a single market. I know nothing.
ang_cire 2y ago
Increasing profits just enables attacking competitors in other ways than via product competition. The narrative that profits get turned into RnD instead of executive bonuses and stock buybacks or acquisitions is a Econ 101 fantasy. In the real world, Cisco, Meta, Amazon, and Microsoft don't make better products to win, they just buy Splunk, Insta, Whole Foods, and Bethesda.
ang_cire 2y ago