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0 sats \ 3 replies \ @BallLightning OP 17h \ parent \ on: Free market competition - good and bad econ
I am not sure whether it is common or not. I am just using logical deduction here.
I see quite a few actually (current, not historical), but I don't want to delude the discussion with concrete example. Concrete examples are usually complex, and different sides always interpret them in a way that supports their case.
In that case, I've said my piece.
In a theoretical sense, it isn't plausible for reasons I've already stated.
In an empirical sense, it doesn't seem to happen, although I grant your point about real cases being messy.
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Hm... I won't comment the so called "empirical" sense, for the reason I stated. But I kind of think both of the theoretical issues that I stated were not addressed completely.
I mean for example this thing I posted:
I think that will depend on the size difference. A large conglomerate can get into a niche with many smaller players. It can operate a few years losing money on that particular thing. And even though it is sustaining more losses than the competitor, the competitor may be limited even by the smaller losses he is sustaining.
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I can't spend all my time shooting down every underspecified hypothetical situation.
In general, if one market actor is sustaining losses and selling below the market rate other factors will render that unsustainable before it yields the profit they ultimately want.
The form that takes will differ by scenario, but it will be some combination of waiting them out or finding a way to make use of the below cost product they're offering.
If the competitors don't have the capital at hand, there are others who do. That means credit might be extended in what becomes a speculative attack on the predatory pricer and it might mean the smaller players get bought out by someone who can afford to wait.
Regardless of the form it takes. The attempt at predatory pricing won't recoup the losses later by jacking up prices.
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