As someone who has no idea about professional implemented game theory, I wouldn't have thought to assume that there could be no short-term benefits when two companies merge. Intuitively, this seems obvious to me. The reason why a monopoly is bad, I would have seen in the long-term development of the company in this example. Quite spontaneously I can think of reasons like: - The specialised workers cannot trade their wages high because they are dependent on the job in the absence of competing companies. - The company has no incentive in the future to reduce production costs or improve the product. - Due to its size (and the number of employees) the company has more influence on politics. It's funny how different the perspective is when you don't understand the craft.
Is it really monopolies being good for consumers under specific circumstances that you’re talking about here? It sounds like you’re talking about high supply being good for consumers whether there is competition or a monopoly and that monopolies are generally bad for consumers because it is generally more difficult for monopolists to provide as high supply as competitors. However, competitors never manage to provide as high supply as they should be able because they have to divert resources into advertising their advantages over each other that monopolists can keep in actually providing the supply.
The conclusion is logical as long as the premises are correct, but i doubt that 2 merged firms that have different cultures (like in your example, one has better design skills and one has better employee/customer management) will have improved efficiencies in both realms when fused. I understand the argument that the FTC makes, but that seems like begging the question. Their argument is based on did the same reasoning that you are explaining. But if the firms end up merging and having significant degradation of their efficiencies (I imagine that the larger the firms the more ineficiencies would rise, as an issue of scale), then the formula that you have in the second half of the video would not show that the production would be improved, and the rest of the argument would be invalid.
You know what else lowers marginal cost and captures economies of scale through decreased competition and eliminated redundancy? Worker-owned and socially-planned production.
Only in the short term. In any monopoly, including a state monopoly, internal inefficiencies will inevitably grow as there is nothing to keep them in check (nobody gets fired when their position becomes redundant as the monopoly can just raise prices) and also there is no incentive to improve.
As someone who has no idea about professional implemented game theory, I wouldn't have thought to assume that there could be no short-term benefits when two companies merge. Intuitively, this seems obvious to me.
The reason why a monopoly is bad, I would have seen in the long-term development of the company in this example. Quite spontaneously I can think of reasons like:
- The specialised workers cannot trade their wages high because they are dependent on the job in the absence of competing companies.
- The company has no incentive in the future to reduce production costs or improve the product.
- Due to its size (and the number of employees) the company has more influence on politics.
It's funny how different the perspective is when you don't understand the craft.
Lower production costs with fixed price always means more profit
FTC? More like “I’m so glad these videos are free!” Keep up the extremely high-quality work!
cringe
@@vedaantsingh172 True, but so is everything else.
@@PunmasterSTP huh?
@@vedaantsingh172 Lots of things are cringe these days, including just commenting "cringe"
@@PunmasterSTP glad i could bring you back to this video after 2 years
Very interesting. I would like to see more about how a certain price is settled upon (perhaps through auctioning).
Is it really monopolies being good for consumers under specific circumstances that you’re talking about here? It sounds like you’re talking about high supply being good for consumers whether there is competition or a monopoly and that monopolies are generally bad for consumers because it is generally more difficult for monopolists to provide as high supply as competitors. However, competitors never manage to provide as high supply as they should be able because they have to divert resources into advertising their advantages over each other that monopolists can keep in actually providing the supply.
The conclusion is logical as long as the premises are correct, but i doubt that 2 merged firms that have different cultures (like in your example, one has better design skills and one has better employee/customer management) will have improved efficiencies in both realms when fused. I understand the argument that the FTC makes, but that seems like begging the question. Their argument is based on did the same reasoning that you are explaining.
But if the firms end up merging and having significant degradation of their efficiencies (I imagine that the larger the firms the more ineficiencies would rise, as an issue of scale), then the formula that you have in the second half of the video would not show that the production would be improved, and the rest of the argument would be invalid.
You know what else lowers marginal cost and captures economies of scale through decreased competition and eliminated redundancy?
Worker-owned and socially-planned production.
I think Mises has addressed this question way better than I can.
Only in the short term. In any monopoly, including a state monopoly, internal inefficiencies will inevitably grow as there is nothing to keep them in check (nobody gets fired when their position becomes redundant as the monopoly can just raise prices) and also there is no incentive to improve.
Stop wasting our time and answer the damn question
You the same guy from 7 years ago 👀 cause if u are u blessed it odeee
I really hope I'm still me...
@@Gametheory101 Are you still the same you from 11 months ago now? 😎
Still hope so!
@@Gametheory101 Phew, that’s good to know! Maybe I’ll check back in a few months or years from now…