Viewing a single comment thread. View all comments

ttd_76 t1_itsmd2r wrote

Reply to comment by RVAMS in Rent too damn high? Landlords have formed an illegal cartel according to several reports by cogitator_tertius

It's not a textbook example of price fixing so long as there is no agreement between competitors.

More information makes the market more efficient. If prices are going up it means rent was artificially low.

And what you should have learned in Econ 101 was that even if these businesses were actually colluding on pricing, it's efficient. They can get together and keep prices high, and in the sane way purchasers can get together and boycott products.

−18

RVAMS t1_itsrkke wrote

Bro you’re literally calling price fixing, which is absolutely anti consumerist and anti free market as being “efficient”. You can’t fucking boycott the entire local housing market that gets raised with the tides of several large companies inflating prices, it’s a basic human necessity. The reason it is illegal is because it is efficient for the companies who do it, not the consumer.. And it is textbook, you don’t have to be in some official collusion handshake agreement for it to be price fixing, which is why they’re getting sued.

If I own 15% of the tomatoes and you own 15% of the tomatoes, and we run the same computer program that sets the price of our tomatoes. And they both say we should set them 10% above market value based on trends. Now a third of the tomatoes available to all people are priced slightly higher than they should be. We sell less tomatoes in the short term, but the other tomato peddlers notice they are able to sell their tomatoes at better margins than they were previously, raising the cost of tomatoes. Now our little algorithm raises that cost of tomatoes yet again.

Now imagine that scenario, but there is a shortage of tomatoes, and it’s the only thing that anyone is allowed to eat. That is what is happening here.

16

ttd_76 t1_itsvifu wrote

The other vendors don't have to raise the price of tomatoes. They can keep their prices the same and just sell a lot more tomatoes by taking away your customers.

If the entire tomato industry raises prices and people are willing to pay those prices, then those prices are not "artificially high." They're an indication that the previous prices were non-efficiently low and we were overconsuming tomatoes.

In a perfectly competitive market, existing vendors colluding is not inefficient. One vendor having a monopoly isn't even inefficient.

The problem is that those situations probably shouldn't happen in a perfect market. The real market failure is with barriers to entry or something else, not the pricing algorithm.

>Now imagine that scenario, but there is a shortage of tomatoes, and it’s the only thing that anyone is allowed to eat.

This is pointing at the fact that housing should be a public good. Which I agree with. But again the problem is not a pricing algorithm. It's that we value equity more than efficiency for this good and therefore it should not be a private market in the first place.

−11

RVAMS t1_itsypir wrote

Except when there is a finite anount of tomatoes and it isn’t a consumable item. It is a commodity that you maintain and can fluctuate the pricing of. You don’t sell more tomatoes, you sell the same tomatoes you have always had for an increased price because people have to buy them, and there is no alternative.

Does the entire problem stem from a computer algorithm? No, nobody is making that argument. But price fixing can exacerbate an already fucked up economic system, which is what is happening.

The fact that you’re arguing there isn’t a problem with price fixing or monopolies is frankly fucking hilarious. Or waxing philosophical about a theoretical and completely inapplicable ‘perfect market’ to the benefit to nobody in this conversation really is some libertarian big brain play.

9

PhuncleSam t1_itvykct wrote

You can’t just boycott having a place to sleep

1