From: Platt Holden (pholden@sc.rr.com)
Date: Mon Oct 03 2005 - 13:25:00 BST
Khaled
> Platt (previously)
> > Your hypothetical is faulty. If the competitor makes a better
> > product, it will be difficult for you to drive him out of business by
> lowering
> > the price on your inferior product. If your competitor's product is
> > inferior to yours, his higher price will soon put him out of business.
> If
> > both products are the same in quality and you drive the competitor out
> of
> > business followed by your own bankruptcy, then a new producer will
> > arise if there is enough consumer demand, or the product will die a
> > natural death. In any event, the government should not interfere.
>
> Hi Platt, there are a few things we agree on after all.
>
> The last scenario has 2 possibility, if I go backrupt after driving him out
> then a new comer will come and take over. Great. The Golden question is,
> what if I have deep enough pockets that every time a new competitor shows
> up with an equal product, I lower my prices so they go out of business and
> I keep a monopoly.
>
> 1. I do not beleive in government interference here. OK?
OK. But the only competitors I know with inexhaustible deep pockets are
governments. If they can't collect money by taxes, they borrow it. If they
can't borrow it, they print it.
> 2. Where does "fair" come into play? Where do you see a free market
> equaling that scenario out.
When a competitor shows up with not just an equal but a better product.
Even Bill Gates couldn't keep Steve Jobs from grabbing a share of the
computer market. The classic case was back in the 50's when the U.S. auto
industry had a lock on the U.S. market, until the Germans and the Japanese
offered better cars, proving once again Pirsig's contention that the free
market (as opposed to socialist economies) is more Dynamic, encouraging
Quality.
Platt
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