Quote:
Originally Posted by SteveEisenberg
But we surely know that, in some industries, below cost pricing is used as a temporary tactic to drive up prices sky-high.
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Absolutely.
But the reason why you don't see it used everywhere is because the price of entry for competitors isn't always high. It takes a *lot* of money and infrastructure to start an airline; it takes very little to start a cupcake stand. Nobody is going to lowball their way into cupcake dominance because the moment the cupcake price goes up, new bakers will jump in to undercut them. You can't buy present market share with future profits as you can in other industries.
eBookstores lie somewhere in the middle and, oddly enough, it is up to *publishers* as a whole which way it moves.
Their decisions and actions have a bearing on the startup costs and overall prospects for new players. So far, their ebook moves, much as their pbook moves have for decades, have all favored big, established retailers over small or new ones. So the industry has seen massive consolidation rather than diversification.
It's their call.
(shrug)