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economic politics

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    #32
    oscarBravo
    Technology & Internet Moderators Posts: 28,804 Mod ✭✭✭✭oscarBravo


    donegalfella wrote: »
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    Of course - it negates the advantages of competition. Once all the "competitors" in a market have agreed to artificially inflate their prices, the consumer loses out. And you'd have to agree there's a pretty high barrier to entry in the road-building business.


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    #33
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #34
    nesf
    Registered Users Posts: 27,645 ✭✭✭✭nesf


    donegalfella wrote: »
    This post has been deleted.

    Said Game Theory is based on models of human behaviour that have been routinely shown to not hold in research done in Experimental Economics. Also the evidence from the markets is that cartels can be remarkably stable things.


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    #35
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #36
    nesf
    Registered Users Posts: 27,645 ✭✭✭✭nesf


    donegalfella wrote: »
    This post has been deleted.

    Ah, but just because there's a chance that cartels can sometimes do this is not justification for letting cartels form in general. If even one cartel out of a million acts in the interests of consumers then your last line holds but it doesn't make it attractive as an option.


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    #37
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #38
    DadaKopf
    Closed Accounts Posts: 4,731 ✭✭✭DadaKopf


    I would hold that the number is a lot higher than one in a million! History suggests that cartels that are not supported explicitly by the state (such as OPEC) either break down after a relatively brief period, or stabilize in ways that are to the long-term benefit of the consumer.
    Evidence, please.


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    #39
    nesf
    Registered Users Posts: 27,645 ✭✭✭✭nesf


    donegalfella wrote: »
    This post has been deleted.

    I wasn't suggesting one in a million as an accurate statistic. It was pointing out how thin the evidence could be and still hold up your conclusion.


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    #40
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #41
    nesf
    Registered Users Posts: 27,645 ✭✭✭✭nesf


    donegalfella wrote: »
    This post has been deleted.

    Interesting paper, though it's really a question of cost-sharing vs price-fixing that he deals with.

    The issue is this, in market with low barriers to entry cartels are highly unstable both in theory and practice. In markets with high barriers to entry this is not necessarily the outcome that one can expect. Monopoly profits will attract competition this is true but it is barriers to entry that say whether or not monopolies will be stable in a given market.


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    #42
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #43
    oscarBravo
    Technology & Internet Moderators Posts: 28,804 Mod ✭✭✭✭oscarBravo


    donegalfella wrote: »
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    If the state doesn't, who will?


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    #44
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #45
    oscarBravo
    Technology & Internet Moderators Posts: 28,804 Mod ✭✭✭✭oscarBravo


    donegalfella wrote: »
    This post has been deleted.
    So you don't see any issue with a cartel of road owners making sure that there's a €50 toll to drive from Dublin to Cork?


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    #46
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #47
    oscarBravo
    Technology & Internet Moderators Posts: 28,804 Mod ✭✭✭✭oscarBravo


    donegalfella wrote: »
    This post has been deleted.
    I'm not sure what's involved in road owners "cheating", but what's to stop the road owners and railroad owners forming an even bigger cartel?
    Do you see any issues or problems with the current road monopolist, which pockets more than 60 percent of the retail price of unleaded petrol, plus road tax, plus VRT?
    The current road monopolist has a popular mandate and, at least in theory, has my interests at heart. A private road operator, by definition, has only one motive: profit maximisation.

    I'm not defending our government's record of efficiency, by the way; I'm just challenging the idea that it's possible (or even desirable) to have a perfectly competitive market for roads.


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    #48
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #49
    Sand
    Registered Users Posts: 12,588 ✭✭✭✭Sand


    A private road operator, by definition, has only one motive: profit maximisation

    True, but that could (would?) imply the road operator wants as many customers as possible which would further imply reasonable cost [ for the service offered], and at least a reasonable level of service offered [ fighting congestion for example]. Having profit maximisation as a goal doesnt imply negative outcomes by default.

    State operators on the other hand have no interest in what happens to the road once its built, or if anyone uses it at all. Bridges to nowhere and so on.

    Either way there is less chance of a private cartel than a public one.

    That said, natural monopolies [ waterworks, power lines, telecommunications] such as infrastructure do tend to be better held in the hands of some neutral entity whose revenue is maximised by getting as many users of the infrastructure as possible - i.e. a telecommunications infrastructure monopoly whose revenue would be generated from "renting" their infrastructure to electricity companies and power stations - acting as the middle man between generation and the client facing entities. The state would tend to be the default choice for that role, but they usually also want to take over the market entirely in those cases and erradicate or greatly hinder the market and its benefits.


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    #50
    Belfast
    Registered Users Posts: 1,355 ✭✭✭Belfast


    joe freethinker wrote: »
    what dose it mean to be liberal/conservative on the economy and what are irish political parties like on the ecomomy???:confused:

    liberal/conservative are labels and the policies behind those who claim to be liberal or conservative changes with the place and time.

    I do not think political labels are a useful concept.


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