4 ms·
well, there is a limited demand for widgets. if i make cheaper widgets, i'm taking away sales from my competitor. isn't that the same? your observation isn't
by andylei 17y ago
well, there is a limited demand for widgets. if i make cheaper widgets, i'm taking away sales from my competitor. isn't that the same?
your observation isn't something unique to finance. capitalism, or just business, is inherently competitive. guy A wants 1 widget; your factory and my factor can't both sell our widget to him. isn't that also a zero sum game?
- PebblesRox 17y agoBut making cheaper widgets can increase widget demand to an extent, right? Maybe guy B, who couldn't afford a widget before, can now buy one. By producing more widgets for the same total cost, you are increasing the amount of wealth in the world.
- bhousel 17y agoI think it would be more like if I get to find out that Guy A wants to buy some widgets before you get this information. I also get to find out that you're selling widgets before Guy A gets this information. I can buy widgets from you for cheap because you don't know that there is a market yet. I can sell them to Guy A for expensive because he doesn't know there are plenty of widgets to go around. On the face of it, there's really nothing wrong with this - too bad for you and Guy A that you don't have access to the information that I do. But I think the concern is that I can use my position to control the markets, or that everyone will lose faith in the game and stop playing.