271–280 of 324 posts
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Right on the money: https://youtu.be/Bo2BxTcVp74 Mark Blyth is definitely one of the most clear-sighted economists of today.
Really? Why did someone downvote this very elucidative video? Update: My posts on this thread are getting downvoted a lot, and I'm just stating facts! It seems I'm hitting a nerve... :D
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Taxing land doesn't increase rent; it's an inelastic good with greater demand than supply. See Ricardo's Law of Rent, Henry George, or basically any analysis of land tax (or indeed, taxing any monopoly good). The incidence of land tax is well known to not fall on the tenant.
My property taxes currently falls on my tenant. And my rent currently pays for my landlord's property taxes
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Why not both? The modern dismantling of antitrust regulation and enforcement is a significant driver of both. It's gotten way worse now than ever, to the point where private equity firms like Vanguard and Blackrock can be the biggest shareholders in direct duopoly competitors (KO and PEP are an example), or where investors and producers are permitted to fully horizontally and vertically integrate (AMZN is an example)…
Econ 101 is using those models for the same reason Phys 101 uses Newtonian mechanics in a vacuum with rigid bodies of low mass and no charge and with all collisions being elastic. They are a good enough approximation to reality in a lot of useful situations, and understanding them does help in later classes when they bring in relativity, electromagnetism, fluids, thermodynamics, quantum mechanics, bodies that aren't…
The thing I ultimately found pretty amusing that nearly every model had perfect information, many buyers, many sellers as part of the assumptions and almost every time I see somebody citing Econ 101 either 2 or 3 of the assumptions aren't there.
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Absolutely. But for competitors to raise margins bilaterally requires cooperation, because each side can take market share by keeping prices low. I just wonder if the cooperation might come in the form of, say, one powerful shareholder of both competitors making calls to the boards of directors of both competing companies. Unexpected consequence of passive investing?
Is this really the case though? All shareholders are pushing for higher returns because of inflation, it's not an indication of collusion, it's an indication that the market conditions have changed. As I said on the flip side the fact that all workers are pushing for higher salaries isn't a reflection of collusion between different sets of workers, it's just a reflection of the new economic conditions on the ground.
However, if both companies had enough shareholders in common -- or just one big shareholder in the Soda Index -- then they sort of stop being competitors, and just become brands.
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Only if the competition thinks the increase in share is worth more than the increase in per unit profit. And depending on the industry, there might not be much more to be gained by scaling up. Going from 45% to 60% of the market might not be more profitable than an extra few percent per unit.
That's hitting the nail squarely. If your margin is 5%, going to 10% is far better and far easier than doubling your market share.
We usually expect that competitors would try to compete, and going from 5% to 10% market share would result in getting undercut so badly that you lose far more customers than the higher margins are worth. It's not so easy to hand-wave the reasons why that hasn't happened here.
No shit, Sherlock: In Portugal, for most of 2022 to this day, the price of 1L own/white brand of semi-skimmed milk (one of the most basic and essential staple foods) has been the exact same - to the cent - on all different supermarket chains (Lidl, Audi, Auchan, Jerónimo Martins, Intermarché, Sonae, Dia, etc.) operating here. And, it has risen in steady small increments at exactly the same time in all of them, multip…
Price matching is not the same as price fixing. Price fixing requires collusion. The distinction is pretty arbitrary but it is there.
If I announced that I'm raising the price 10 cents next week, and everyone decides to follow suit at the same exact time, that isn't price fixing.
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>Reviewing this article and comment section has convinced me that it is politically possible. How so?
If people believe that inflation is caused by companies raising prices, the obvious solution (if you accept the premise) is price controls.
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For almost all goods, price increases will decrease the amount purchased. If there's still insufficient excess supply capacity after substantial price increase and decreases in people's purchasing power and consumption, then the reason competition isn't lowering prices is because that's the actual market-clearing price where demand is equal to the amount that can be produced. This can't be fixed by forcing companies…
> For almost all goods, price increases will decrease the amount purchased... Except that housing, at least in America, has dynamics which are nothing like that. And housing is by far the largest living expense for a very large fraction of Americans.
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Really? Why did someone downvote this very elucidative video? Update: My posts on this thread are getting downvoted a lot, and I'm just stating facts! It seems I'm hitting a nerve... :D
Complaining about downvotes is a good way to earn more of them.
Downvote yourself asshole...
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> For almost all goods, price increases will decrease the amount purchased... Except that housing, at least in America, has dynamics which are nothing like that. And housing is by far the largest living expense for a very large fraction of Americans.
High housing prices do reduced demand, just not by much. People living with roommates or parents are example of people priced out of the market. This is demand reduction.
Its possibly that price level could over time effect actual demand (as well), that is, it could convert people who would buy at price $X to people who would only buy at a price lower than $X or not at all, but that’s not what your example is.
(It does, actually, induced demand from availability it observed, anf the reverse from the opposite condition would be logical.)