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52 sats \ 3 replies \ @elvismercury 5 Jun \ parent \ on: FBI Searches Property Management Company in Rent Price-Fixing Investigation econ
This is clever, but like most such clever things it's a massive simplification, or so it seems to me. E.g., big company driving small companies into oblivion by selling things at a loss until competition is wiped out is a thing. Buying up all competitors in a region, then jacking up prices once there's no alternative, is also a thing.
I'm trying to find it, but there's a work of economic history that goes through the Robber Baron era and debunks most of the predatory pricing claims.
In general, it's much less of a thing than people think. Far more often, prices just stay down after they drop.
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I'd love to see that, although expressions of this in the modern era are what I had in mind. The "acquire competitors and then raise prices" is something I know from personal involvement in healthcare -- our own private analysis, and of course, the cartel-like behavior on lock-step insulin pricing that's almost too blatant to merit discussion.
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I'm pretty sure this is the book I was thinking of: https://www.abebooks.com/9780870001598/Myths-Antitrust-Economic-Theory-Legal-0870001590/plp
In the case of a highly regulated and protected industry like healthcare, it doesn't surprise me at all that this sort of thing happens. My wife worked in hospital admin, briefly, so I have a little bit of exposure, in addition to the many episodes of Econ Talk on the subject. There are so many barriers to entry for competitors, but they're all artificial creations of the state.
I don't think these kinds of exercises of market power are feasible, more generally.
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