Comment by paytonjjones
3 hours ago
> informal agreement to keep transaction fees about the same
This would be like, ridiculously illegal. It's also not practical; if you can steal customers, the incentive to undercut is very strong.
3 hours ago
> informal agreement to keep transaction fees about the same
This would be like, ridiculously illegal. It's also not practical; if you can steal customers, the incentive to undercut is very strong.
Of course, but that's the thing about "informal" agreements: presumably there's no record of it. Price collusion happens way more than most realize. I was at a trade show for my employer when a competitor walked up to our booth and out loud proposed that we should all fix our prices. We didn't of course, but the brazenness of saying something like that out in the open like was what surprised me.
I thought that only happened in hilarious corporate training videos
The good thing about price collusion is that it's hard to coordinate. If even one competitor defects (and they have every advantage to, as they'll win big), then the cartel falls apart.
One of the big rules of commerce is that competing on price is generally a no-no for large markets. Usually, the powers that be would rather compete on a perceived value; that is how “informal price collusion” works.
Price/cost is the last thing you compete on unless you have a wholesale advantage, which nobody in this particular industry does (visa/mastercard set core rates)
Source: I’ve worked with higher ups in numerous commerce operations.
Commerce is actually even worse than many realize. Look up pepsi and walmart as a small example.
sounds like an org prisonner's dilemma
1 reply →
That assumes that
* it instantly brings them a ton of consumers * they have capacity to serve those customers
if they don't competitor can just keep higher price (especially if it is just small middleman fee most people might not care that much about)
And even if both of those are true worst possible case is them expanding to handle influx of customers and then competition following in few months, making their investment moot
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> This would be like, ridiculously illegal. It's also not practical;
Not if you pay a bit of dividends to jared or dtj
i just wonder why you think fees are high. seemingly the only thing that keeps fees low elsewhere in the world is regulations.