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Tag Archives: Competition

Bonus Quotation of the Day…

… is from page 37 of the original, 1982 edition of Dominick Armentano’s excellent but regrettably neglected volume Antitrust and Monopoly: Anatomy of a Policy Failure (original emphasis): It is only because consumers find resources satisfactorily allocated that potential competitors find entry difficult or impossible. Product differentiation, especially a differentiation that increases prices, can act as a barrier to entry only if consumers prefer that differentiation, and are willing to...

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Quotation of the Day…

… is from pages 3-4 of Israel Kirzner’s 1974 Hillsdale College lecture “Capital, Competition, and Capitalism” as this lecture is reprinted in Competition, Economic Planning, and the Knowledge Problem (Peter J. Boettke and Frédéric Sautet, eds., 2018), which is a volume in The Collected Works of Israel M. Kirzner: The theory of the competitive market process teaches that where resources within a society leave opportunities for improvement via exchange, production, or some combination of...

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Bonus Quotation of the Day…

… is from page 170 of the late, great UCLA economists Armen A. Alchian’s and William R. Allen’s Universal Economics (2018; Jerry L. Jordan, ed.); this volume is an updated version of Alchian’s and Allen’s magnificent and pioneering earlier textbook, University Economics: In any case, scarcity implies competition to resolve who gets how much of which goods. If monetary competition is suppressed, other forms of competition must occur. DBx: Remember this inescapable reality when you next...

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In Praise of Jurisdictional Competition

Here’s a letter to an unhappy reader of the Wall Street Journal: Mr. K__: You’re “disappointed with” my “ridiculous letter” in today’s Wall Street Journal – your reason being that my letter allegedly reveals that I am “uninterested in the public good.” Specifically, you accuse me of failing to see that people who migrate from states with draconian Covid restrictions to states with lighter restrictions “selfishly seek license to live like they wish and avoid helping pay the cost of...

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Bonus Quotation of the Day…

… is from page 178 of Israel Kirzner’s insightful 1967 lecture “Methodological Individualism, Market Equilibrium, and Market Process” as this lecture is reprinted in Austrian Subjectivism and the Emergence of Entrepreneurship Theory, (Peter J. Boettke and Frédéric Sautet, eds., 2015), which a volume in The Collected Works of Israel M. Kirzner (original emphases; footnote deleted; link added): Too often it is implied that the economic problem facing society is that of allocating resources...

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The Immense Importance of Freedom of Entry

In my latest column for AIER, I argue that the best protection against monopoly power is freedom of entry. If entrepreneurs are free to enter and to exit industries, there is no need for antitrust enforcement. A slice: Yet no amount of training and skill, or even a Nobel Prize, as an economist equips anyone with God-like knowledge of the practically infinite number of ways that businesses might devise, or stumble upon, to make their products more attractive to consumers. No one has, has...

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Competition Should Be Judged By How Well Consumers – Not Producers and Sellers – Are Being Served

Here’s a letter to the Wall Street Journal: Editor: Chris Jones attempts to justify antitrust actions against large retailers by complaining that small retailers during the pandemic faced “higher wholesale prices than competitors and less access to critical goods such as paper products, cleaning supplies and grocery staples” (Letters, Jan. 10). Let’s describe the same situation more informatively: large retailers secured lower wholesale prices than competitors and more access to critical...

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Lower Concentration for Consumers

In 2011, I asked the following question on a problem set: About 140 years ago, most—maybe all—major U.S. cities had a number of beer companies that produced and sold beer just for the particular city they were in plus about a 30-mile radius.There were well over 100 beer companies, no one company sold more than about 4% of the total amount of beer sold nationally, and the top 8 companies sold less than 25% of the total amount of beer sold. Then two things happened...

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Market efficiency in sports

Sports markets are not as efficient as financial markets. Nonetheless, the concept of market efficiency does have important implications for sports. Consider how the NBA has evolved in response to the three point shot. Teams gradually learned that the best strategy was to take lots of three point shots (long shots) and layups (relatively easy 2 point shots.) A recent article in The Ringer describes how defenses have adjusted to this optimal strategy so that “quality...

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Elephant Ear Sandwiches and Amazon

I’ve been going to physical therapy for my left hip and leg and realized that pretty much everything I do there I can do at home if I get just a few more relatively cheap pieces of equipment. I’ll save time and money and I’ll save my insurance company even more money. Of course I don’t value a dollar saved for the insurance company at a dollar, but I value it more than zero. I care about others, after all, whether they be the insurance company or other...

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