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"Google... a monopolist with high fixed costs and limited ability to price-discriminate" Google is not a monopoly and neither was Google Reader. Krugman is int

"Google... a monopolist with high fixed costs and limited ability to price-discriminate" Google is not a monopoly and neither was Google Reader. Krugman is intentionally disingenuous here to further his argument. Krugman knows Google isn't a monopoly. He doesn't care. He's always trying to push the same narrative with his blog: Big corp is evil so government should step in and save the day! For anyone familiar with his blog, his agenda is extremely transparent at this point.

badgar 14y ago
Thank you for identifying that Krugman is both an economist and an ideologue. HN readers identify closely with the former so they often ignore or excuse the latter.
_stephan 14y ago
Where does Krugman state that Big corp is evil? Are you talking about banks? Krugman doesn't state that Google is a monopoly and he certainly isn't disingenuous here. He's just using the Google Reader situation and an article by Ryan Avent as a hook to make an interesting economic argument about monopoly markets with a certain cost and consumer demand structure. BTW, building a competitive search engine is arguably associated with relatively high fixed costs, and any social site is hugely affected by network effects. These are both traits that can lead to natural monopolies.
- dreamdu5t 14y ago
  Where does Krugman state that Big corp is evil? The title of the post is, "The Economics of Evil Google." It's not written as a question, but a statement. Nowhere in the article does he give any indication that it is sarcastic. Krugman doesn't state that Google is a monopoly and he certainly isn't disingenuous here. He doesn't state it, he implies it [1]. Otherwise, what does being a monopoly have to do with Google? High fixed cost and limited ability to price discriminate are not characteristics exclusive to monopolies. I don't see the reason to refer to "a monopolist" unless he is implying that Google is a monopoly. When I read the article, I concluded: * Krugman believes Google had a monopoly on RSS. [1] * Krugman believes that RSS is a crucial public infrastructure [2] * Krugman thinks the solution is a government-provided RSS reader. [3] Just curious, what did conclude from this article that is different? [1] "First, it’s a well-understood though not often mentioned point that even in a plain-vanilla market, a monopolist with high fixed costs and limited ability to price-discriminate may not be able to make a profit supplying a good even when the potential consumer gains from that good exceed the costs of production." [2] "It seems hard at this point to envision search and related functions as public utilities, but that’s arguably where the logic will eventually lead us." [3] "So what’s the answer? As Avent says, historical examples with these characteristics — like urban transport networks — have been resolved through public provision."
teebs 14y ago
I think Google search is close to a monopoly, and so was Google Reader. Search is pretty much synonymous with Google. Apparently Google has 67% market share, but I'd guess that most people not using Google just use Bing or Yahoo! because that's the default in whatever browser they have. http://searchenginewatch.com/article/2244472/Google-Once-Again-Claims-67-Search-Market-Share http://searchenginewatch.com/article/2244472/Google-Once-Aga...
- Gormo 14y ago
  A "monopoly" consists of 100% market share, not 67%.

badgar 14y ago

Thank you for identifying that Krugman is both an economist and an ideologue. HN readers identify closely with the former so they often ignore or excuse the latter.

_stephan 14y ago

Where does Krugman state that Big corp is evil? Are you talking about banks? Krugman doesn't state that Google is a monopoly and he certainly isn't disingenuous here. He's just using the Google Reader situation and an article by Ryan Avent as a hook to make an interesting economic argument about monopoly markets with a certain cost and consumer demand structure. BTW, building a competitive search engine is arguably associated with relatively high fixed costs, and any social site is hugely affected by network effects. These are both traits that can lead to natural monopolies.

dreamdu5t 14y ago
Where does Krugman state that Big corp is evil? The title of the post is, "The Economics of Evil Google." It's not written as a question, but a statement. Nowhere in the article does he give any indication that it is sarcastic. Krugman doesn't state that Google is a monopoly and he certainly isn't disingenuous here. He doesn't state it, he implies it [1]. Otherwise, what does being a monopoly have to do with Google? High fixed cost and limited ability to price discriminate are not characteristics exclusive to monopolies. I don't see the reason to refer to "a monopolist" unless he is implying that Google is a monopoly. When I read the article, I concluded: * Krugman believes Google had a monopoly on RSS. [1] * Krugman believes that RSS is a crucial public infrastructure [2] * Krugman thinks the solution is a government-provided RSS reader. [3] Just curious, what did conclude from this article that is different? [1] "First, it’s a well-understood though not often mentioned point that even in a plain-vanilla market, a monopolist with high fixed costs and limited ability to price-discriminate may not be able to make a profit supplying a good even when the potential consumer gains from that good exceed the costs of production." [2] "It seems hard at this point to envision search and related functions as public utilities, but that’s arguably where the logic will eventually lead us." [3] "So what’s the answer? As Avent says, historical examples with these characteristics — like urban transport networks — have been resolved through public provision."

teebs 14y ago

I think Google search is close to a monopoly, and so was Google Reader. Search is pretty much synonymous with Google. Apparently Google has 67% market share, but I'd guess that most people not using Google just use Bing or Yahoo! because that's the default in whatever browser they have. http://searchenginewatch.com/article/2244472/Google-Once-Again-Claims-67-Search-Market-Share http://searchenginewatch.com/article/2244472/Google-Once-Aga...

Gormo 14y ago
A "monopoly" consists of 100% market share, not 67%.