Note: I am biased, I'm working on a platform that does exactly that, taking an orthogonal direction to real estate analytics: https://www.hellodata.ai. Using 100% public data.
Because injecting a middleman into the situation creates a facade of plausible deniability. Obviously, such deniability is complete nonsense to anyone with eyes and a brain, but here we are.
There are laws against this kind of behavior what is lacking is sufficient enforcement of them.
Agree completely regarding lack of sufficient enforcement. Honestly we could use a serious wave of RICO enforcement at the highest level in this country, targeting (but not limited to) pharma giants, major "healthcare" and & insurance companies, big banks, etc.
In polygamous countries, they are able to enforce laws against adultery, for example.
But they can’t change the 80/20 pareto distribution of 80 percent of the women being attracted to 20 percent of the men. They can’t change the fact that men can have multiple children at a time and repopulate after a war, while women cannot (I am not talking about triplets here).
Any society in history that tried to enforce equality for men and women in, say, the armed forces, would be weeded out through natural selection. Men are just more expendable, and also more polygamous etc. This is all due to evolutionary selection pressures on societies. And polygamous societies have more war because they have a lot more frustrated young men (literal not figurstive incels due to the law polygamy and anti adultery law enforcement, who then join some movement led by old men etc partly to get women).
Western liberal societies have decriminalized adultery and premarital sex. They unsqueezed the balloon in one area and so have less violence. But now the same pareto distribution plays out, just in the premarital years. 20% of the men sleep with 80% of the women, unofficially and hush hush. Then most people eventually pair off “having sown their wild oats” and raise children together for a while.
You can replace the war with business, brawn with money, but the natural results will still be there.
Banks will still lend easiest to those who need it the least.
Investors will still invest in startups because others do. Money won’t be allocated to the many startups that need it.
Try to ban it. See what happens.
Can you ban investors “colluding” to all invest in a startup? They do it for many reasons:
Signaling (social proof)
Reducing risk (other investors are likely to top up if needed)
Network opportunities (if others are opening doors for this startup, it’s more likely to succeed)
Networking opportunities (getting into the same round as a famous VC)
Strength in numbers (banding together)
As we found out, half the VCs in Silicon Valley even banked at the same bank!
Even the government overseers supposed to oversee these industries (eg Wall Street, Big Pharma etc) are also part of the revolving door.
But nevermind all that. I have that simple question. There are many reasons why emergent behavior occurs among investors who collude to invest in the same startups, the old boys’ clubs, the demo days.
What will you do to ban all that natural emergent behavior, to “prevent emergent collusion”?
Why is collusion of GameStop or AMC Wall Street Bets meme investors to drive up the price of a stock against hedge funds not worthy of banning? It was cut short in a way, by RobinHood which quickly stopped living up its “for the people” namesake.
Why is collusion of investors to drive up the price of certain startups in private rounds, like Adam Neumann’s WeWork or Travis Kalanick’s Uber not worthy of banning?
Or banking at the same Silicon Valley bank? Or Peter Thiel starting a run on this bank and many of them in unison pulling money out and wiping out the shareholders in a bank that served Silicon Valley for decades?
I mean, I don’t think any of that should be illegal, but what is your consistent criterion and why should others go with whatever your criterion is, versus something else? Or is it just all about “I don’t like that particular thing?”
> The big question of course is what to do. Cartels that form by collusion are illegal and clearly not in the interests of the general population. But this work muddies the waters somewhat. If cartel-like behaviour is an emergent property of an ordinary market, how should it be controlled, regulated and punished?
They're not saying "it's impossible to regulate". They're saying it presents some sticky questions on how you do so.
And even their platitudes just highlight that we don’t know how to eliminate it. Why do you take it for granted that this behavior should be punished, controlled? Why do you think punishment is the best way to address this phenomenon? It’s like the war on drugs and many other initiatives that the governments keep going despite no measurable improvement for decades. Why do the same thing over and over and expect a different result?
OK, what in https://arxiv.org/pdf/1201.3798 concludes cartel-like things that arise naturally can't be regulated?
Successfully banning emergent phenomena is generally much harder than someone colluding.
Now asking to prove they “can’t” be regulated is a loaded question. You CAN engage in all kinds of foolish and futile things (witness the war on drugs, for instance, or Prohibition in USA). You can show people you’re “doing something” but in reality nothing much ever changes, after an initial improvement.
Because you can’t win that war against human nature.
Here, tell me how you can make sure banks lend to the people who need the money first, before the people who have better credit.
Tell me how we through regulations can stop investors colluding and investing in the same startups and piling on to the same stocks.
Did you even read my own article? I spoke about GameStop and AMC, and many examples besides that.
No, you very specifically claimed "Their actual mathematical conclusions are what matters" and derided the non-mathematical conclusions in your own link as "platitudes". What are those mathematical conclusions with regards to regulation of naturally arising cartel-like behavior?
I never claimed they mathematically concluded that cartel-like things that arise naturally can't be regulated.
That’s what makes it a strawman. Nevertheless I already addressed your strawman above and you ignored all of it!
It shows that cartels can emerge naturally rather than via deliberate collusion. That's all. It says nothing about being able to ban them.
If you mean “promulgate a prohibition about them” then sure. You can ban them.
If you mean “successfully ban them”, ie “eliminate them to nearly zero occurrences” as I meant it, then no, you can’t.
Show me an example where naturally emergent GROUP phenomena that were constantly emerging from widely distributed natural behavior, were successfully banned.
The only way it has ever been reduced is by introducing alternatives that were just as good. Such as making the Impossible Burger widely available rather than banning meat. Or making electric cars instead of banning fossil fuel usage in vehicles.
Sure, if we're ditching mathematical certainty now. The American auto market, where the emergent group phenomenon of making unsafe cars (and millions of consumers purchasing them) despite things like seatbelts being available was addressed very successfully via regulation requiring those safety features.
Or smoking cigarettes, which was largely eradicated in public without even needing an outright ban.
Now, the idea of creating unsafe cars is maybe closer, since one could argue “cutting corners” is an emergent GROUP phenomenon. So maybe you’re saying government can ban “cutting corners” as a phenomenon across the industry. And not, say, what the pinto did.
I would say that, over time, an industry such as aviation etc. painstakingly builds up improvements, such that there is enough technology that not cutting corners is just as cheap or cheaper than cutting them. For example, square windows led to a plane blowing up so they made them rounded. Eventually things just made it into standards so it’s a lot harder to actually get unsafe windows etc.
You mentioned seatbelts “being available”. That’s the point, it’s just one technology. Anti-lock brakes is another. Industries do this gradually without government “banning unsafe windows.”
For example, the government “banned monopolies” and broke up Ma Bell. Into a bunch of large pieces. But for decades they couldn’t get the cost of long distance calls to get low. If they instituted “price controls” that would be the attempt you’re talking about of eradicating the “emergent cartels” among the phone companies.
But as technology improved, and Voice Over IP used packet switching, costs quickly dropped to zero. What the catalyst really was, was that peer-to-peer file sharing networks initially designed to GET AROUND THE LAW (copyright law) in the form of Kazaa etc. made the government start fighting THAT emergent phenomenon, and the Kazaa developers turned to other uses and founded Skype.
It is that tech that now led to dropping of costs overnight to zero and the explosion of audio and video innovation, webrtc etc.
And now the governments can try to “ban end to end encryption” including in webrtc. And according to you they will be successful.
Maybe they can just mandate that everything cost nearly $0, but mandates and bans are not what made it happen. It was a slow process of technology improving, usually DESPITE government.
I'm under the impression this would be clearly illegal if all these rental companies got in a room with some pencils and calculators and binders full of price data to do the same thing. Why is it different if they do that via a middleman?