Quote:
Originally Posted by Andrew H.
This *never* happens. It's a myth trotted out by people who are trying to find a downside to lower prices.
Walmart drove out many businesses and didn't jack up its prices. Big box stores (Borders, B&N, Toys "R" Us, Best Buy, etc.) drove out the competition and didn't jack up the prices. Amazon is no different.
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To really discuss this, we would have to come up with price statistics for each of your example companies. I agree with you on general merchandise bought at WalMart. But, impressionistically, as I parent I do recall what seem tremendous toy price increases from child to child
As for your *never* statement above, you don't fly much, do you? Evidence of tremendous price increases when US Airways gets an exclusive route out of Philadelphia is overwhelming.
Most of the examples I was thinking of for getting a monopoly, through loss leaders, and then tremendously jacking up prices, came from transportation. And transportation may be a little like books. Just as P.D. James doesn't, except to a small degree, compete with Erik Larson, New York-Atlanta doesn't really compete with New York-Boston. I don't think these are comparable to markets where the goods are closer to being a commodity, as when, say, WalMart sells Ibuprofen or Best Buy sells a 25 inch TV. Also, Best Buy, WalMart, B&N, etc. never got as big a market share as I think Amazon has the potential to get in books.