Replies to post #7301 on e.Digital Corporation (fka EDIG)

[drven]

Powers' argument is wrong b/c he characterizes the CD market as an oligopoly; it is not. In the case of oligopoly the market is shared by a few firms whose product may or may not be differentiared. Oligopoly is the prevalent form of the market structures. Examples of oligopolistic industries include automobiles, steel, aluminum, petrochemicals, electrical equipment and computers. The main characteristic of this market structure is that firms set price or output based partly on strategic considerations regarding their present actual behavior and anticipated responses of their competitors. In other words, the pricing policy of each firm takes into account what its competitors will do and assumes that its competitors are doing the same. Therefore, the competition under oligopolistic structure is usually strong and the untistrust laws do not apply. Indeed, there is nothing wrong with oligopolies as long as there is no price fixing which is a general provision.
This is not the case of the recording industry. Since, in the minds of customers, the CD of one artist is NOT a substitute of the CD of another artist, and this is the crucial test, each and every company can and does act as a monopoly and as a result can and should be subject to the antitrust laws.
Whether the Power is paid by the recording indusrty is not the issue. The issue is that he is dead wrong.

[drven]

Powers' argument is wrong b/c he characterizes the CD market as an oligopoly; it is not. In the case of oligopoly the market is shared by a few firms whose product may or may not be differentiared. Oligopoly is the prevalent form of the market structures. Examples of oligopolistic industries include automobiles, steel, aluminum, petrochemicals, electrical equipment and computers. The main characteristic of this market structure is that firms set price or output based partly on strategic considerations regarding their present actual behavior and anticipated responses of their competitors. In other words, the pricing policy of each firm takes into account what its competitors will do and assumes that its competitors are doing the same. Therefore, the competition under oligopolistic structure is usually strong and the untistrust laws do not apply. Indeed, there is nothing wrong with oligopolies as long as there is no price fixing which is a general provision.
This is not the case of the recording industry. Since, in the minds of customers, the CD of one artist is NOT a substitute of the CD of another artist, and this is the crucial test, each and every company can and does act as a monopoly and as a result can and should be subject to the antitrust laws.
Whether the Power is paid by the recording indusrty is not the issue. The issue is that he is dead wrong.