Linked by Kroc on Thu 30th Aug 2007 13:03 UTC
Editorial I hear often that when something new appears that "competition is good". The primary reasons competition is seen as good, are: it drives down prices; it gives consumers more choice; it pushes technology forward, quicker. Competition is not good because: competition is why consumers have to choose between HD-DVD and BluRay; competition is why DRM exists; and more. In this article, each of the supposed benefits of competition will be looked at in more detail.
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wow
by kadams on Fri 31st Aug 2007 01:20 UTC
kadams
Member since:
2007-08-31

I haven't really posted any comments on OSNews in a few years now, but I had to speak up because... well... this article is giving me a headache.

Technology would still move forward even without competition.[...] Linux would still exist exactly as it is now.

That is not true. Industry competition is related to the level of industry innovation. Linux would not have developed as fast as it did with out being pushed by the industry.

Yes, technology would still move forward without competition. However, it would not move forward at the same rate. Competitive (put not perfectly competitive) industries drive innovation. In a purley competitive market there is very little industry driven innovation, as well as very little profit. As the market moves away from pure competition innovation increases and firm profits increase. (which is good for the consumer, as well as the firm) As you move more towards oligopoly then to monoploy, innovation will decline.

If it were Amiga instead of Microsoft, we could have been looking at computing hardware with 100x the graphical capability of existing technology.

No, not really. If Amiga was the monopoly in the market they most likely would have done the same thing Microsoft did. Your example of IE explains how when a corporation becomes a monopoly the rate of innovation decays because they are no longer forced to innovate.

We're almost five years behind where the web should be

HUH? You just complained that about competition pushing "technology forward, quicker" and that it added to TCO, etc. Now you are complaining about the lack of competition in the browser industry, which created product stagnation.

"Competition by it's definition is to beat the opponent."

That is true. I would say that the process of competition in good for the consumer, but the end result (a monopoly) would not be. By most schools of thought, the consumer doesn't really want competition to end.

"When the opponent is beaten, there is no need to continue with any of the competitive actions, such as lowering prices or improving technology. Competition ultimately ends with stagnation and vendor lock in"

So... you just made the same point I did. You just stated that competiton lowers prices and improves technology, and stated that you did not want competition to end because it "ultimately ends with stagnation and vendor lock in".

So if you don't want competition to end, then you must want competition to contiune. But if you wanted competition to continue... then why did you write this article??


Competition exists for one purpose only, to increase the bank balances of share holders. It has nothing to do with consumers.

The consumers are the share holders.

After you read a basic economics book, you might want to read "Competition and Innovation: An Inverted U Relationship"
www.economics.harvard.edu/faculty/aghion/papers/comp_and_innov.pdf

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