alt Hacker News> You'll have to create a case that harm is taking place. Harm does not mean a PlayStation 5 is now $200 more expensive or that inflation exists.
"Things cost more because of collusion" is always a harm. It doesn't matter if the product is maize or gold-plated haute couture, competitors are supposed to compete.
The question is, what's the best way to tell the difference between tacit collusion and just normal supply and demand?
It's not that easy, but here's a decent test: It's tacit conclusion if 1) net margins have been high for e.g. 3 years and 2) no new companies have entered the market in that period of time, or were acquired by an incumbent if they did.
Notice that this works for everything. Even if you're making luxury goods, the price may be high, but so are production costs, and there is a lower volume to amortize fixed costs over, so long-term net margins should be the same as they are anywhere else or you should see new entrants. If you don't, it's reasonable to infer collusion and leave it on the companies to prove otherwise.
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I see the logic in your reply, thanks :)
>1) net margins have been high for e.g. 3 years
That breaks down for industries with long investment cycles. It takes years to build a fab, so the fact that DRAM prices have been high for 1-2 years isn't too suspicious, considering they've been burned by boom and bust cycles before.
>Notice that this works for everything. Even if you're making luxury goods, the price may be high, but so are production costs, and there is a lower volume to amortize fixed costs over, so long-term net margins should be the same as they are anywhere else or you should see new entrants. If you don't, it's reasonable to infer collusion and leave it on the companies to prove otherwise.
I can't tell you don't buy luxury goods ;)
People don't pay $10k+ for a Hermes bag because they want something that carries stuff 100% (or even 1%) better than a normal bag. They're buying it for the brand image/history. That's not something that can be replicated by a new entrant with some money to splash out on R&D or even marketing.