[pdonis]

> it is a marketplace-as-a-service

To the extent this makes a difference, because of Amazon's efforts to monopolize various market segments by undercutting competition, it decreases the amount of information Amazon has about other market participants. A perfect monopolist, by setting monopoly prices, decreases the value of the price information it gets through transactions, because there are no other competitors offering the same goods at different prices to compare to, so the prices of the monopolist's transactions convey less information about the preferences of other market participants. That makes the market less efficient.

[morningseagulls]

>>it is a marketplace-as-a-service

>To the extent this makes a difference

It does, because you're arguing as if Amazon sells stuff. It doesn't (just) do that: it's a market-maker that provides a venue for other vendors to sell stuff.

So it's already an error to talk about Amazon as a monopolist, when Amazon isn't the only marketplace out there with a global reach. But you're also making a category error, because you wrote:

>A perfect monopolist, by setting monopoly prices, decreases the value of the price information it gets through transactions, because there are no other competitors offering the same goods at different prices to compare to, so the prices of the monopolist's transactions convey less information about the preferences of other market participants.

Amazon doesn't set prices per se, at least not for vendors in its marketplace that are not itself. So it doesn't do whatever you think it's doing when you were writing that paragraph. Certainly there are "other competitors offering the same goods at different prices to compare" with, because Amazon's marketplace include other vendors. But Amazon is running a marketplace, not (just) being a vendor. There's a difference in category there.

[pdonis]

> it's a market-maker that provides a venue for other vendors to sell stuff

That's not what a market maker is. A market maker is a market participant that guarantees to buy or sell something if no other buyer or seller can be found.

Providing a venue for others to sell stuff is a straightforward market transaction: Amazon sells its services to others for a price. There's nothing special about it, and standard Hayekian economics accounts for it just fine.

> Amazon doesn't set prices per se

To the extent this is true (as you say, for vendors that are not itself), it just reinforces the point I made above: that what Amazon is doing as a "marketplace as a service" is just a straightforward market transaction, selling services for a price, and does not give Amazon any sort of special status.

> Amazon is running a marketplace, not (just) being a vendor.

Running a marketplace, if it does not mean being a monopolist (which you are insisting it does not), is being a vendor, a vendor of particular services.

[morningseagulls]

>> it's a market-maker that provides a venue for other vendors to sell stuff

>That's not what a market maker is. A market maker is a market participant that guarantees to buy or sell something if no other buyer or seller can be found.

Right, but the similarity between a market maker in finance, and a marketplace maker in ecommerce, is that both of them have a lot more information than an ordinary buyer or seller. It doesn't matter if Amazon doesn't really act as a counterparty: the point is about how much knowledge it has, compared to the average participant.

>Running a marketplace, if it does not mean being a monopolist (which you are insisting it does not), is being a vendor, a vendor of particular services.

I was pointing out that there are two levels we're looking at:

1. Amazon as a provider of a marketplace

2. Amazon as that marketplace and what it entails about how much knowledge it possesses.

Recall that this is in the context of Hayek's arguments in The Use of Knowledge in Society, because the article's author referenced that explicitly.

Now, when I said Amazon isn't a monopolist, this is in terms of 1. Amazon is definitely not the only provider of an ecommerce marketplace with a global reach. In that sense, it's not a monopoly.

But Amazon is a "monopoly" in the sense that Hayek alluded to in his essay, i.e. in terms of 2. Hayek wrote in that essay:

The halfway house between the two, about which many people talk but which few like when they see it, is the delegation of planning to organized industries, or, in other words, monopoly.

Technically, it is still an oligopolist, since it is not the sole provider of ecommerce in America, but "organized industries" sounds like an apt way to describe what Amazon is doing. And it's in this particular sense of Hayek's that I referred to Amazon as a "monopoly".