[e2e] It's all my fault

Steven Bauer bauer at mit.edu
Fri May 18 08:08:52 PDT 2007

Noel Chiappa [jnc at mercury.lcs.mit.edu] wrote:
>Second, abusive 'ordinary' monopolies aren't that easy to break, especially
>if the market is large, and the monopolist has accumulated considerable
>economic resources thereby. The monopolist's economic power is used to make
>it impossible for a new competitor to get a foothold.
>The usual tactic is to drop prices to below what it costs to provide the
>goods/service, i.e. it's impossible for the competitor to make a profit. The
>monopolist can usually run this way for a long time, e.g. years. (Heck, even
>non-monopolist large companies, ones which are losing money through simple
>incompetence, can last a long time: look at many airlines, and US car
>Most financiers are not interested in getting into a situation where they
>have to i) invest a really large amount of money, ii) wait years to get any
>return at all (remember, prices <= cost, so no profits), and iii) probably
>cannot get the same rate of return as they could if they deployed their
>resources in some less-cuthroat part of the economy.

Perhaps the market for packet-switched networking is simultaneously a
monopoly with large profit margins and also a "cutthroat" market
with better risk-adjusted returns elsewhere...  :)

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