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>I don't understand the distinction you are making. If you have a massive excess of demand ready to pay any price, and a limited supply, of course the sellers w
by coldtea 2mo ago
>I don't understand the distinction you are making. If you have a massive excess of demand ready to pay any price, and a limited supply, of course the sellers will take advantage, that's how any market works. They can do that because of the lack of supply.
The question is how much of this demand is actually based on AI, or just an excuse to fleece regular buyers (and AI is not really the actual demand driving such prices).
Memory manufacturers have driven up prices via collusion many times in the past (and paid fines for it), without AI or some similar high demand vertical market existing.
But I don't think it's the case now, see my answer elsewhere here for why.
- RickHull 2mo ago> or just an excuse to fleece regular buyers In a market with healthy competition (no collusion), this generally can't happen. Every single vendor is incentivized to lower their prices slightly at all times, with a floor at cost plus margin.
- nubg 2mo agowhy plus margin? the floor is cost
- deleted 2mo ago[deleted]
- pixl97 2mo agoFloor is below cost if you think you can put one of your competitors out of business before you run out of money, and you'll make the money back after doing so. And this includes even after fines.
- nubg 2mo agothat's true, also see "loss leaders" like milk in supermarkets
- coldtea 2mo ago>In a market with healthy competition (no collusion), this generally can't happen. We're talking about the memory market here. The "healthy competition (no collusion). Every single vendor is incentivized to lower their prices slightly at all times, with a floor at cost plus margin" is the fairy-tale version they teach at 101s.