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Monopoly Money - Ed's journal
sobrique
sobrique
Monopoly Money
OK, so the definition of Monopoly: http://en.wikipedia.org/wiki/Monopoly
"In economics, a monopoly (from Greek monos , alone or single + polein , to sell) exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it"

Does that mean, that these companies that are 'too big to be allowed to fail' and thus have received government handouts are de-facto monopolies?
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Comments
draxar From: draxar Date: February 4th, 2009 11:55 pm (UTC) (Link)
No.

An individual member of one of these companies can influence the terms under which others have access to it, but they cannot do so 'siginificantly'.

When Microsoft said you will sell PCs with Windows on/with IE on/only our PC, or whatever it is they did, then they were exercising monopoly power.

None of the major banks, nor the major car makers have that kind of power. There are enough competititors in their marketplace that they can't rewrite the rules.

What they are is oligopolies.

An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). The word is derived from the Greek for few (entities with the right to) sell. Because there are few participants in this type of market, each oligopolist is aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms. Strategic planning by oligopolists always involves taking into account the likely responses of the other market participants.
cbr_paul From: cbr_paul Date: February 5th, 2009 01:35 pm (UTC) (Link)
I think it would certainly make them an oligopoly, since if one large company, RBS for instance, did collapse, consumers would still have a number of alternatives. But then, it's been like that for several decades anyway.
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