You’re seeing an oligopoly in a prisoner’s dilemma. I’ll try to better explain what I thought I said at the end of my last post:
The suit alleges that because these three firms control ~95% of the market and face huge entry barriers ($20B+ for a new fab), they successfully suppress the natural incentive to compete. Instead of one firm expanding to capture the DDR4 market (which would lower prices), they allegedly coordinated to all exit that market simultaneously, creating an artificial scarcity that independent self-interest would rarely sustain.
When this prisoner’s dilemma operates “correctly”, every firm fears being the “sucker” who cuts production while others don’t. This fear often forces them to compete (produce more) rather than collude, keeping prices lower than they would be under a true monopoly.
The lawsuit argues that the market should naturally suffer from this instability, protecting consumers. Collusion removes this natural check.
You’re seeing an oligopoly in a prisoner’s dilemma. I’ll try to better explain what I thought I said at the end of my last post:
The suit alleges that because these three firms control ~95% of the market and face huge entry barriers ($20B+ for a new fab), they successfully suppress the natural incentive to compete. Instead of one firm expanding to capture the DDR4 market (which would lower prices), they allegedly coordinated to all exit that market simultaneously, creating an artificial scarcity that independent self-interest would rarely sustain.
When this prisoner’s dilemma operates “correctly”, every firm fears being the “sucker” who cuts production while others don’t. This fear often forces them to compete (produce more) rather than collude, keeping prices lower than they would be under a true monopoly.
The lawsuit argues that the market should naturally suffer from this instability, protecting consumers. Collusion removes this natural check.