--- Ian Murray <seamus2001 at attbi.com> wrote:
>
> ----- Original Message -----
> From: "andie nachgeborenen"
> <andie_nachgeborenen at yahoo.com>
> > But this is the puzzle for neoclassical economics.
> If
> > you don't drop your price when costs fall, why
> don't I
> > drop mine to sell more quantity? And then you must
> > drop yours to compete. That's what the model
> predicts.
> >
> > jks
> >
> =================
>
> That presupposes perfect diffusion of the new cost
> saving technique. In
> an oligopoly setting where a firm that happens to
> stumble on a cost
> saving technique, the incentives are enormous not to
> divulge the
> existence of that technique via a price change. Let
> the other bastards
> find out by reading the 10-k over a couple of years,
> or, conversely -if
> you're one of those other bastards, hire those who
> made the cost saving
> technique.
>
> Ian
>
>
> Ian
>
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