In large part because we've been sitting on our hands with regard to real antitrust action for the better part of the last 40 years.
This lack of real choice is hidden behind a plethora of brands all owned by the same large corporations.
And it turns out when there are like 4 large corporations that are responsible for almost everything produced in a market it's really easy to do de facto price fixing (in the sense that they [usually] aren't officially talking to each other but have unspoken ongoing gentleman's agreements) allowing all parties to get a nice share of the price gouging with no party triggering a race to the bottom.
Can you bring up a specific example of such a consolidated market for a particular commodity where more than 50% are dominated by the same conglomerate, please?
Kimberly-Clark, Proctor & Gamble, Edgewell, and Energizer comprise like 90% of the pads and tampons you'll find on the shelves in an American grocery or discount store.
The largest shareholders of all of the above are the same: Vanguard, BlackRock, and State Street. Combined, they make up ~25% ownership of all of them.
Alternatively: firearms
For a while, Cerberus Capital Management owned approximately a majority of US firearms companies by production, including: Remington, Barnes Bullets, Bushmaster, DPMS, Advanced Armament, Marlin Firearms, H & R Firearms, Para USA, The Parker Gun, Dakota Arms, Tapco, and Storm Lake Barrels. All of the above were acquired by Cerberus from 2006-2009.
All of the above were folded into "Freedom Group". That was later rebranded as "Remington Outdoor Company", then sold piecemeal three years later (in 2020).
> The largest shareholders of all of the above are the same: Vanguard, BlackRock, and State Street. Combined, they make up ~25% ownership of all of them.
As a CEO, why would sharing 25% of shareholders with another corporation stop you from exploiting their weakness, increasing your market share, increasing your stock price and in the end, increasing your bonus? You're a publicly traded corporation, your contract is public, your bonus mechanic is public, these 25% don't have any other means of control over you.
Which orifice did you pull the 50% strawman out of?
If you're going to ignore the obvious problems with massive consolidation in areas like supermarket chains and virtually everything sold in those chains or the massive problems with consolidated telecomm/ISP companies and the de facto regional monopolies they carve up then I don't think you are arguing in good faith.
It ends up being a fallacy of composition in a system that is supply constrained.
What keeps prices under control in any market is that somebody with supply capacity loses out and doesn't use that supply capacity - because the price achievable doesn't make it worth using that supply capacity.
That's the issue we have at present. There is insufficient spare supply capacity available to be brought online if prices go up. The solution is shifting consumption to investment, but at present the short term view is seen as more lucrative than the long term one.
Did you mean lower prices to increase their market share?
It's a great question. Usually that competition is what I would expect, but I wonder if there are really the proper incentives in place for competing corporations to compete. I've speculated about this a few times in the past, but corporations ultimately are accountable to their shareholders. And it's increasingly common for their shareholders to also own shares of all their competitors, which is the whole idea of buying an index.
To make more money, of course. Increasing your sales from 12% of the market to 20% of the market by offering a burger (or whatever) for $4 of pure profit instead of competitor's $6 doesn't stop the gravy train.
Only in idealized markets and even there where consumer demand is elastic. For inelastic products industries raising their prices in unison can all see greater profits because the changes in demand are outweighed by the increase in profits. So much of what we learn of markets are idealized games to make sense of extremely complex emergent systems made of people.
Within the span of a few dollars for many items people will often eat the difference for familiarity and out of habit. I don't know about you but I rarely sit and comparison shop between similar options at the store I grab the thing I'm used to and expect to get because that's the habit and lowest friction.
> Within the span of a few dollars for many items people will often eat the difference for familiarity and out of habit.
Which is exactly my point: either a rival corporation would be able to get market share via undercutting, or price increases are not actually that sensitive to consumer to begin with.
I actually think it’s the opposite—if you notice your usual purchase suddenly goes up 20% it’s very noticeable because you are always buying it. It may cause you to buy an alternative.
This lack of real choice is hidden behind a plethora of brands all owned by the same large corporations.
And it turns out when there are like 4 large corporations that are responsible for almost everything produced in a market it's really easy to do de facto price fixing (in the sense that they [usually] aren't officially talking to each other but have unspoken ongoing gentleman's agreements) allowing all parties to get a nice share of the price gouging with no party triggering a race to the bottom.