Hacker News Reader

Comment by evanwise | Hacker News Reader

The only possible reason for barriers to entry is regulation? There are many industries where startup costs are high for reasons intrinsic to the business and margins are relatively low so you are unlikely to get investment from outside sources. Grocery stores for example. You are trying to apply a toy model from econ 101 to explain the behavior of complex real world markets, and when the model doesn't fit you invent bogeymen to blame. This is more like religious fundamentalism than any kind of science.

View on HN

Grocery stores are already operating at rock bottom – in most markets, at least.

It is not that difficult to try opening your own grocery store. In fact, many restaurants did exactly that during COVID-19 shutdowns. Realistically, succeeding is going to be nigh impossible, though, as there is not much you can compete on. You are not going to be able to sell the product for less.

It is not meaningfully bound by a regulatory barrier, but it is limited by there being no further room for competitiveness, as also spoken to in the previous comment.

I find it very funny that a forum of people who ostensibly work in the highest profit margin businesses in the world, enjoying the highest industry wide compensation to quality of life at work ratios, claim that the lowest profit margin businesses in the world with some of the lowest compensation to quality of ratio work has enough pricing power to allow them to reap undue windfalls of profit.

Who was saying that??

https://news.ycombinator.com/user?id=paul80808

https://news.ycombinator.com/item?id=37869309

Is it possible businesses are colluding resulting in increased profit margins? Obviously.

But we have publicly listed companies with public financials showing non material increases, or even decreases, in profit margin. Which means those businesses are just increasing prices to cover their own increasing cost of goods sold.

When it's entirely enabled by your vein of work, it is absolutely fair game to call out your fellow practitioners. Further, not everyone here is FAANG. Nor does everyone here necessarily get the majority of motivation on what they work on from the paycheck rather than the effects of the work done.

As the ostensible computer scientists in the room. Sitting back and not pointing out that there exist "monopoly pricing indirection mechanisms" implemented as businesses is really failing to do one's moral and ethical responsibility.

> As the ostensible computer scientists in the room. Sitting back and not pointing out that there exist "monopoly pricing indirection mechanisms" implemented as businesses is really failing to do one's moral and ethical responsibility.

And yet the empirical evidence is not there due to nonexistent profit margins. Show me the sustained increase in profit margins if you are going to claim malfeasance. And I am not claiming there is not malfeasance, I just don’t want to see innocent parties (those with low single digit profit margins) get accused of it for no reason.

Thank you. Much too often the replies in threads on prices are just a conspiracyfest of people alleging things that make no economic sense without providing any kind of evidence.

Because it is of course completely obvious that collusion among very large, very complex competing entities is a very easy proposition, you just need a magic algorithm to do it! /s

Reply on news.ycombinator.com