capitalism

Markups Everywhere: The Evidence Is Compelling That We’re All Getting Fleeced

"The fact of monopoly markups has been obvious to Buffett and the big banks for years. Now the academic evidence seems to be catching up."

"The fact of monopoly markups has been obvious to Buffett and the big banks for years. Now the academic evidence seems to be catching up."
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1 comment on “Markups Everywhere: The Evidence Is Compelling That We’re All Getting Fleeced

  1. I don’t know what the big surprise is here. The whole point of competitive strategy is to create a sustainable competitive advantage that transfers pricing power to a firm. If done effectively it allows the firm to maintain surplus profits (called alpha in investing) for as long as the advantage is maintained. In a world of so-called perfect competition only “normal economic profits” can be earned and no one has an excess. However, through technology, innovation and other means firms can break away from competitors and improve their profit rate. It’s not a trick, it’s the whole point of effective strategic management.

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