Control of immigration

Clay Shirky clay@shirky.com
Wed, 31 Oct 2001 10:53:23 -0500 (EST)


> > > The larger the market you have access to, the better off you are ---
> > > the more people have to compete to get your business.  You have more
> > > power with a larger market.
> >
> Clay said:
> "Hogwash." [Shortened in translation. ed.]
> 
> To be fair to Kragen, I think this is a little misleading.  I wouldn't say
> it's backwards, because if you reverse Kragen's original statement, you'd
> have to show that getting access to a larger market makes you worse
> off.

Yep, wasn't clear enough. The statement I was reacting to was that
market size increases market power. The two are orthagonal -- what
increases market power is a lack of competition, and at even levels of
competition, the power conferred by larger markets is the power to
*cut* prices in order to gain market share by exploiting economies of
scale. 

So your analysis of the Canadian pleasure boat manufacturer does what
Kragen's view does not, namely identify a) other suppliers in the
market and b) postulates a way to offset competition by product
differentiation. Note that in this case the power comes not from
market size at all but from product strategy. You can make a
differentiated product even with no change in market size.

-clay