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by emodendroket 3041 days ago
That's not really how it's "supposed to" work. It's called predatory pricing and the most ardent free-market defenders claim it doesn't exist because it's economically irrational (check out the contentious discussion and Frankenstein-like text of the Wikipedia entry on the topic).
2 comments
sol_remmy 3041 days ago
"predatory pricing"

So they're offering prices below cost and that is considered "predatory"? Last time I checked low prices are good for consumers

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emodendroket 3041 days ago
It's predatory because it is below cost and is just intended to preserve a monopoly on a market. The goal is to eliminate all competitors, then charge a price that a competitive market couldn't sustain. The harder it is for new competitors to enter your market the better it works.
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jfrankamp 3041 days ago
In the long run, higher prices for consumers. After the predatory prices have driven out competition.
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mseebach 3041 days ago
> most ardent free-market defenders claim it doesn't exist

Yes, and the people on the other side of that debate are perfectly reasonable, dispassionate truth-seekers.

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emodendroket 3041 days ago
Do you feel I've unfairly presented someone's position? I don't agree with it but I think I have presented their case reasonably. Unless your objection was to my claim that they are "ardent defenders of the free market," but I think that is a reasonable characterization of the Adam Smith tie types.
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mseebach 3041 days ago
You've misrepresented the conflict as being one-sided, when it's not. There's a real difference of opinion and analysis, and plenty of "ardency" on both sides.
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emodendroket 3041 days ago
On one side you have people who believe that predatory pricing is an issue and likely also that government regulation is needed to prevent it. On another you have people who believe that markets are so efficient that predatory pricing cannot happen. What do you think I'm missing here? Can you be any more specific than just vaguely saying I'm missing some nuance?
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mseebach 3041 days ago
You only said half of that. That was what you were missing.
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emodendroket 3041 days ago
I figured the reader could easily infer that there was a different group of people who did believe in predatory pricing.
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