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“About a third” doesn’t sound anywhere near a monopoly to me. This is all demand-side inflation: For any number of better and worse reasons (mostly worse), as

“About a third” doesn’t sound anywhere near a monopoly to me. This is all demand-side inflation: For any number of better and worse reasons (mostly worse), as building codes have gotten stricter and fires have become rarer, municipal spending on fire departments has exploded. Well-funded fire departments buy more expensive trucks than they probably need, just like well-funded police departments buy military-class SWAT equipment they probably don’t need.

tomrod 1y ago
That's an HHI of 1089 at best. Pretty high, indicating consolidation is a big deal.
brookst 1y ago
A third of the market isn’t a monopoly, but it is enough economy of scale to allow for reaping huge profits if competing against a long tail of smaller competitors.
arrosenberg 1y ago
Monopoly is a misnomer, because it implies a single seller. In reality any market with a small number of incumbents will exhibit anti-competitive behavior, which is what people usually mean when they talk about monopolies and antitrust law. With a third of the market, a single company can effectively set prices based on desired margins, rather than having to compete on price. Do you have evidence for your claim about well funded fire departments splurging on unneeded equipment? Police departments buy military surplus through federal programs that specifically encourage it [1]. It has nothing to do with how well funded they are, which is why you see that equipment show up even in smaller and poorer areas that don't have particularly well-funded police or the need for a Bradley fighting vehicle. [1] https://www.marketplace.org/story/2020/06/12/police-departments-1033-military-equipment-weapons https://www.marketplace.org/story/2020/06/12/police-departme...
8bitsrule 1y ago
If there are two more companies just like that one, that's 3-thirds of the business, right? Point is, what's to stop that from happening? In that business or any other, it's bad for many, good for a very few. In one side-effect, the wait time for a new truck has reached up to 4 years. And the contracts are being written so that the cost can go up during that wait.

tomrod 1y ago

That's an HHI of 1089 at best. Pretty high, indicating consolidation is a big deal.

brookst 1y ago

A third of the market isn’t a monopoly, but it is enough economy of scale to allow for reaping huge profits if competing against a long tail of smaller competitors.

arrosenberg 1y ago

Monopoly is a misnomer, because it implies a single seller. In reality any market with a small number of incumbents will exhibit anti-competitive behavior, which is what people usually mean when they talk about monopolies and antitrust law. With a third of the market, a single company can effectively set prices based on desired margins, rather than having to compete on price. Do you have evidence for your claim about well funded fire departments splurging on unneeded equipment? Police departments buy military surplus through federal programs that specifically encourage it [1]. It has nothing to do with how well funded they are, which is why you see that equipment show up even in smaller and poorer areas that don't have particularly well-funded police or the need for a Bradley fighting vehicle. [1] https://www.marketplace.org/story/2020/06/12/police-departments-1033-military-equipment-weapons https://www.marketplace.org/story/2020/06/12/police-departme...

8bitsrule 1y ago

If there are two more companies just like that one, that's 3-thirds of the business, right? Point is, what's to stop that from happening? In that business or any other, it's bad for many, good for a very few. In one side-effect, the wait time for a new truck has reached up to 4 years. And the contracts are being written so that the cost can go up during that wait.