Comment by giaour

Comment by giaour 4 days ago

3 replies

Yes, but the monopoly seller has already demonstrated that they will operate at a loss until their competitors go out of business, which is a pretty big deterrent to any new market entrants. They've also demonstrated that no one will be making any money until either the monopolist or the new entrant is out of business, so who would actually launch a new business in that environment?

twoodfin 4 days ago

“Imagine profitability doesn’t matter to ownership, and investors will accept losses—and less losses than a more efficient competitor—indefinitely.”

Even Amazon had to eventually find its way to profitability.

  • giaour 3 days ago

    Yeah, it is theoretically possible to have a marketplace where "predatory pricing" is an accepted though aggressive business strategy, and I'd say that we are roughly there in the US. But the original intent behind the law on the books was to make markets friendly to new entrants, even if that meant sometimes constraining what large participants were allowed to do.

    • twoodfin 3 days ago

      This is an historical question I’m not equipped to answer, but I’d guess it was just the opposite: These laws were intended to protect incumbents from more efficient, better financed new competitors!