So as soon as competition was introduced into the eBook market . . . prices to consumers go up? This sounds like an odd outcome. Isn’t competition supposed to make prices go down?<\/p>\n
Not necessarily. Actually, if you’re among the majority of Government granted monopolies But Kindle’s strategy was on the “benevolent Does that mean There’s also the Still, It may also explain why the harshest actions against Microsoft have come out of the EU. By now, I’m assuming that most of you know the rough outlines of last week’s dispute between Amazon and Macmillan. The shorter version is that once the iPad was introduced, Macmillan used its new leverage to demand that Amazon let the publisher raise the prices of eBooks in order to protect sales of its front […]<\/p>\n","protected":false},"author":80,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-278363","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/278363","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/80"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=278363"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/278363\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=278363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=278363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=278363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nAmericans who view the Sherman Anti-Trust Act as one of the finest
\nlegislative achievements in our history, you’ll be surprised to find
\nthat the evidence that breaking up monopolies helps consumers is
\nactually kind of weak<\/a>.
\nMonopolists often operate in markets where there are great returns to
\nscale, and they keep competition out by offering prices too low for a
\nsmaller new entrant to compete. After the breakup of Standard Oil,
\nprobably the Sherman Act’s most famous scalp, prices for key petroleum
\ndistillates actually rose<\/i>. <\/p>\n
\ndo display higher prices and poorer quality, because the
\ngovernment-granted monopolies don’t need to worry about new entrants.
\nIf cartel agreements were legally enforceable, all monopolies would
\nlook like Comcast. <\/p>\n
\nmonopolist” side: Amazon wanted to attain a virtual monopoly over the
\neBook market by using its bargaining power to keep the prices of eBooks
\nlow. Once Steve Jobs showed that he was willing to give publishers
\nbetter terms, that bargaining power was eroded. <\/p>\n
\nconsumers are worse off? Maybe. As someone who likes to consume cheap
\nelectronic reading material, I’m tempted to say yes. But the
\npublishers would say that if consumers like new books, they need profit
\nmargins high enough to feed the queue. <\/p>\n
\npossibility that once companies have gotten a monopoly, they will start
\ngouging consumers. In practice, you see less of this than you’d think,
\nbecause in the absence of some sort of legal protection of their
\nmonopoly status, they can’t act so badly that people start switching to
\nother companies. But that’s not to say it doesn’t exist. <\/p>\n
\nI think it’s worth noting that while we usually discuss antitrust as a
\nmeans of helping consumers, in fact, it’s more obviously successful at
\nhelping competitors<\/i>. This is why libertarians are so often
\nagainst antitrust interventions: they don’t recognize a right to be
\nfree from competition, even the “unfair” kind. <\/p>\n
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