7 ms·

It is if there's large barriers to entry

TorKlingberg 9y ago
Oligopoly implies the companies are colluding to keep up margins. If the margins are low they must be rather bad at colluding. I know I am nitpicking, but I think people are over-using the word "oligopoly" for any situation where a few companies have most of the market.
- frgtpsswrdlame 9y ago
  Your nitpicking is totally unfounded. Oligopoly refers to the state of the market, not the intent of actors within the market. If there's only a few, large firms it's an oligopoly regardless of the reason.
  - dpark 9y ago
    Depends on the definition you’re reading. Google says it’s “a state of limited competition, in which a market is shared by a small number of producers or sellers.” Limited competition is the lead phrase there. By this definition, parcel delivery is not an oligopoly if it’s competitive.
    - frgtpsswrdlame 9y ago
      The problem here is that: "a market shared by a small number of producers or sellers" is "a state of limited competition."
      - dpark 9y ago
        Limited competitors isn’t the same as limited competition which is the distinction TorKlingberg was trying to make.
        frgtpsswrdlame 9y ago
        Well no... His distinction was that oligopoly required intent. And my point is that limited competitors is by definition limited competition. Really, boiled down my point is that this: "I think people are over-using the word "oligopoly" for any situation where a few companies have most of the market" is really dumb because an oligopoly is any situation where a few companies have most of the market. Perhaps the rise in use of the word oligopoly is reflective of the increase in oligopolistic markets, but it's not due to misuse, certainly not the one he outlined.
        dpark 9y ago
        You're the one who threw in the word "intent", not TorKlingberg. I would further assume that by "colluding", he didn't necessarily mean explicit cartel behavior, but more typical oligopolistic behavior where the "competitors" inexplicably keep prices stable (or increasing) despite the supposed competition. I also disagree that limited competitors is the same as limited competition. The two may often be related but don't have to be. When two competitors have razor-thin margins because they're competing aggressively, there isn't a lack of competition. When 10 competitors somehow manage to keep their prices in sync and increase their margins over time, there is a lack of competition even though the number of competitors is high. But I really don't care to debate definitions further. I chimed in to explain the disconnect between these two views on the meaning of the word "oligopoly". I don't personally care which you prefer.
        travmatt 9y ago
        If one doesn’t believe that a market with only two companies could be competitive, they should consider Uber and Lyft. I wouldn’t be surprised if employees from each dressed up in war paint and brawled a la The Warriors.
- antisthenes 9y ago
  Oligopoly does not imply collusion. Cartel does. If you're going to nitpick, get your terms right at least.

Oligopoly implies the companies are colluding to keep up margins. If the margins are low they must be rather bad at colluding. I know I am nitpicking, but I think people are over-using the word "oligopoly" for any situation where a few companies have most of the market.

frgtpsswrdlame 9y ago
Your nitpicking is totally unfounded. Oligopoly refers to the state of the market, not the intent of actors within the market. If there's only a few, large firms it's an oligopoly regardless of the reason.
- dpark 9y ago
  Depends on the definition you’re reading. Google says it’s “a state of limited competition, in which a market is shared by a small number of producers or sellers.” Limited competition is the lead phrase there. By this definition, parcel delivery is not an oligopoly if it’s competitive.
  - frgtpsswrdlame 9y ago
    The problem here is that: "a market shared by a small number of producers or sellers" is "a state of limited competition."
    - dpark 9y ago
      Limited competitors isn’t the same as limited competition which is the distinction TorKlingberg was trying to make.
      - frgtpsswrdlame 9y ago
        Well no... His distinction was that oligopoly required intent. And my point is that limited competitors is by definition limited competition. Really, boiled down my point is that this: "I think people are over-using the word "oligopoly" for any situation where a few companies have most of the market" is really dumb because an oligopoly is any situation where a few companies have most of the market. Perhaps the rise in use of the word oligopoly is reflective of the increase in oligopolistic markets, but it's not due to misuse, certainly not the one he outlined.
        dpark 9y ago
        You're the one who threw in the word "intent", not TorKlingberg. I would further assume that by "colluding", he didn't necessarily mean explicit cartel behavior, but more typical oligopolistic behavior where the "competitors" inexplicably keep prices stable (or increasing) despite the supposed competition. I also disagree that limited competitors is the same as limited competition. The two may often be related but don't have to be. When two competitors have razor-thin margins because they're competing aggressively, there isn't a lack of competition. When 10 competitors somehow manage to keep their prices in sync and increase their margins over time, there is a lack of competition even though the number of competitors is high. But I really don't care to debate definitions further. I chimed in to explain the disconnect between these two views on the meaning of the word "oligopoly". I don't personally care which you prefer.
        travmatt 9y ago
        If one doesn’t believe that a market with only two companies could be competitive, they should consider Uber and Lyft. I wouldn’t be surprised if employees from each dressed up in war paint and brawled a la The Warriors.
antisthenes 9y ago
Oligopoly does not imply collusion. Cartel does. If you're going to nitpick, get your terms right at least.