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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Jorj X Mckie who wrote (229270)11/18/2009 11:09:08 AM
From: neolibRead Replies (1) of 306849
 
As the market gets bigger and the early innovator that has the market dominance fails to innovate or lower prices, competition steps in at a lower price or with a better product.

Lacking regulatory interference, why would not a market leader simply deprive any new innovators by lowering prices and preventing the new players from achieving critical mass? This is particularly effective when the following two conditions exist 1) high cost of entry barriers such as large scale infrastructure or extensive IP is needed (think Telcom, airlines, railroads, etc) and 2) compatibility with existing IP exists (think Microsoft OS's or Intel CPU's).

If those conditions exist, I can think of three ways to dethrone a dominant player:

1) Regulatory (you don't like that)
2) Customers just decide to pay more for poor products from other suppliers because they understand that monopolies are long term problems. Think Linux vs MS OS.
3 Management is incompetent.

You seem to think 3) works just fine. I concede it works on occasions. I would certainly not want that as the only method for structuring the system I live in.

Perhaps I'm missing something. Is it possible you view patents as government intervention in a free market? Possibly you think there should not be patents, just trade secrets? And if a competitor can figure out your trade secret they are free to use it?
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