alt Hacker NewsBut this conjecture predicts that Steam prices will drop immediately to their final low price. So Steam is actually also a counterexample.
But this conjecture predicts that Steam prices will drop immediately to their final low price. So Steam is actually also a counterexample.
I disagree. Imho, the problem of this simple model is to find a situation in reality which is close enough to fulfill the constraints.
E.g., it is implied that consumers can postpone their purchase longer than the monopolist is willing to realize the profit. Is it the case here?
Or is there actually a game so durable that is not losing its appeal over time?
And is there a game which can be considered a monopoly (as an activity for spending free time)?
All of these points have to be fulfilled, none of them is, i.e., the conjecture simply doesn't apply.