Comments by "George Reynolds" (@karhukivi) on "This is why we can't have nice things" video.

  1. Conspiracies and cartels are often invoked to explain similar behaviour on the part of rival businesses. However, the economic theory of "oligopoly" has an alternative explanation which doesn't require any nefarious activity at all. Three service stations are competing in a small town. The prices are visible to all and one of them decides to increase prices. The others will watch to see if business decreases or stays the same. If they see that the rival is still doing the same business at a higher profit margin, then they will follow suit and increases their prices as well. Likewise, if one lowers prices and seems to be doing better, the others will follow suit. No need for clandestine meetings or skulduggery! It means that the market is not competitive, but rather based on "signalling". How to recognize oligopoly? - look at the advertisements - they will always have claims of better products or services. Monopoly and competitive markets hardly need advertisements at all.
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