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Comment by billy99k | Hacker News Reader

All mature markets eventually end up with 3-5 competitors dominating the market. I don't really see this as an issue.

I also disagree that it's a net negative. Technology adds convenience to these markets and as long as the government isn't price-fixing through strict regulations, we also end up with better prices.

We've seen some of the prices increase after the government decided to regulate the hotel markets. They forced many people to stop renting out their places through sites like Airbnb and now the hotels are free to increase prices accordingly.

If it weren't for Uber and Lyft, the Taxi cab unions would have gladly monopolized the industry charging workers $1,000,000+ for a medallion and not keeping up with technology (Taxis were still hailed in person or ordered on the phone before the tech companies decided to compete).

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Market consolidation usually leads to higher prices, and it can certainly happen with 3 big players dominating a market. AirBnb is an interesting example. My gut feeling is that the service fees (and cleaning fees, bizarrely) are climbing as they gain market share. Unfortunately I'm finding it extremely difficult to get information about what their service fees were in (say) 2015. Would be interested if anyone else knows a good way to find out.

mature markets end up 3-5 competitors because further mergers end up blocked. capitalism would otherwise allow them to contract to a single player. So I'm sure that's one government control that you'd agree is worthwhile.

And even that blocking doesn't matter much anymore, because the owners of all those 3-5 companies are starting to be the same entities. Because the same people/organizations own all of the companies, they no longer care which one is currently winning and so won't push them to compete against each other as much as they would if the ownership didn't have any overlap. They'll push for policies that allow those players to exist together without stepping on each others toes.

Not at all, you see this pattern in markets that regulators ignore too. It's a human limit. You end up with 3-5 competitors because the incremental value of yet another competitor becomes nearly zero very fast. People have very strict limits on how much information about a specific market they care to remember. To even have 2-3 competitors they have to put a ton of work into differentiation and marketing, otherwise people forget they exist.

Sometimes you do see more, and it's indeed because regulators are stopping mergers. The airline market is like that. But it's a mistake and the regulators should back off. It's not helping people to have a gazillion undifferentiated brands, at some point it's just wasteful duplication.

The idea that every market would contract to a single player if not for the benign wisdom of the regulators is a trope. Regulators are tiny compared to the number of markets that exist, but competitive markets aren't the exception, they're the norm. You see it even in very sticky locked-in markets where regulators deliberately decided not to intervene, like operating systems and browsers (Justice Dept effort to break up MS was cancelled).

I think you have OP's comment the other way around. They were saying that markets will naturally tend to fewer than 3-5 competitors, and only prevented from getting there by antitrust.

I think I addressed both ways around: markets naturally tend to settle on 3-5 competitors, unless blocked by regulations.

There are very few markets that are both natural monopolies and stay that way for long periods of time. Outside of things that tend to be owned by governments anyway, like road networks, I'm having a hard time thinking of any.

You're right, I apologise for not reading your post carefully enough.

Whilst pure monopolies are rare, my impression is that surprisingly many markets consolidate to an oligopoly, and that this reduces competition and is generally pretty bad for the consumer.

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