calvoiper
join:2003-03-31
Belvedere Tiburon, CA
| Two monopolists make a duopoly, not competition...
Somebody who's been around the FCC for a while needs to remind this doofus of a Chairman that when there were only two cellular companies offering service, they set prices at a level far above marginal cost--the common result in any duopoly.
Only after we got a third entrant (from either Nextel or PCS services) did we see cellular prices drop and see common benefits like free LD and free nights and weekends.
Time to catch this guy at some conference and lecture him.
calvoiper
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VoIP--the death knell of remaining voice monopolies! |
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JohnSJ
join:2004-08-14
Lafayette, LA
| Re: Two monopolists make a duopoly, not competitio
Thank you, Calvoiper, thank you. A duopoly is not competition and any elementary economics text you care to consult will echo your point. Duopolies save very little money; instead they segment the market in some stable way and continue to gouge at a point just below the point for monopoly rents.
The big debate is over how many companies it takes to have real competition and the answer is, of course, "it depends" but I've not seen a number below 5.
Your cellphone example is one of the best cases of this. Recent consolidations auger a rise in prices; the days of cheap cellular may be fading. The FCC will have blessed this loss of competition. These guys are supposed to know what they are doing! (I worry that they do.) |
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