Comment by Aeolun
2 years ago
> Why wouldn't one company reduce prices and capture the market share from the companies that artificially raised prices?
I feel like the answer here is probably along the same lines as the ‘because we have a good excuse’ line of thinking that caused the massive wave of layoffs a few months ago.
What makes "because we have a good excuse" more plausible of an explanation compared to the straightforward one (ie. "macroeconomic conditions have changed, money has gotten scarcer, and the management and/or shareholders are reacting accordingly by cutting costs and increasing prices")?
I’m not really sure if it’s more plausible, but it seems likely that at least part of the reason would be “all our competitors are raising prices without any ill effects, so we should too”.
I don’t think those large mammoths would go for something uncertain like ‘potentially capturing more market share’ if they have the option of ‘guaranteed increase in profits’.