Why does society have good reasons to subsidize this case?
Deadweight loss implies there was no externality being corrected... Usually there should be.
Again, what is the externality being corrected by subsidizing these transactions?
Deadweight loss implies there was no externality being corrected... Usually there should be.
Again, what is the externality being corrected by subsidizing these transactions?
You are asking why courts and society would priority large swaths of regular consumers over that of a few companies in an oligopoly?
Well I guess the reason is because the courts and society cares more about large swaths of regular consumers than they do about a few companies in oligopolies. Thats just definitionally the reason.
> what is the externality
There is no externality. The courts just care more about this group than the other group, and society is fine with that as well.
> Usually there should be.
No, there doesn't have you be. You can instead just care more about 1 group than another. Thats perfectly normal. And a thing many people society do.
I know the basic econ 101 arguments. Here is a pro-tip though. Economics isn't a morality class. Its descriptive. It says nothing about values. One's value system can simply be to care more about 1 thing than another.
It is not weird at all to say that many people care more about large swaths of regular people than a few massively valuable companies, as is the case in basically all market power court cases.
This isn't a complicated argument here. It is literally baked into our court system to prioritize consumers over multi-trillion dollar companies. Those trillion dollar companies will be fine and people find its ok to help out the little guy over the trillion dollar companies.
Its more complicated then that, actually. If you go back to your basic economics 101 text book, a price being outside of the equilibrium price cause total "deadweight loss", but still produces real benefit for one of the parties.
> We are all losers, except for a small group of subsidized consumers.
Actually it would be the very tiny group of multi trillion dollar companies taking a loss, and their customers winning.
> so the consumer might be billion dollar corpos themselves.
I am sure there are some. But the wide swath of all of employees and customers at all those billion dollar companies put together make up a much larger amount of less powerful people then the couple thousand or so at a few oligopolistic labs.
This is why, once again, courts value consumers over trillion dollar companies, even when its comparing b2b market share (in which case, it is very very clear which side has more market power here, and which side represents a large number of "regular" people).
> We all take a loss.
Actually no. Go back to the econ 101. The couple duopolies lose, and their much larger amount of customers win. Go back to the courts again, which spell this all out very clearly and prefer consumers for a reason.