Well since we don't actually live in an anarcho-capitalist "utopia", governments tend to intervene sooner or later in dysfunctional markets. And I find that regardless of how bad things were beforehand, or how light the resulting regulation, the response from AnCaps is always "You touched it, you bought it!"
Nonetheless, the history of Standard Oil is a pretty compelling example of a natural monopoly.
>If the cost of laying cables is an inhibiting factor for the first company, then it is also the inhibiting factor for any companies which follow.
The difference is the potential ROI for each market entrant.
For the first company, the entry cost may be high, but since there'll be no competition, there's potential for decent profits.
The second company faces the same entry cost, but they also have to compete with the first company, so their potential profits are much lower.
As a result, those who might disrupt the market are much more likely to invest elsewhere.
>And I find that regardless of how bad things were beforehand, or how light the resulting regulation, the response from AnCaps is always "You touched it, you bought it!"
I'm not even sure what that means.
>Nonetheless, the history of Standard Oil is a pretty compelling example of a natural monopoly.
I'd wager that what you think you know about Standard Oil is probably mythical and not based on historical fact.
>For the first company, the entry cost may be high, but since there'll be no competition, there's potential for decent profits.
>The second company faces the same entry cost, but they also have to compete with the first company, so their potential profits are much lower.
And yet I know of cities which have half a dozen ISPs (none of them publicly owned). As I said previously if the existing company/ies are not satisfying customers, then there is room for competition. The second [or third, or fourth...] need not even compete on the same scale as the existing ISP[s]. A local entrepreneur seeing the need, could just wire up his neighborhood. I know of cases where this has happened.
Well since we don't actually live in an anarcho-capitalist "utopia", governments tend to intervene sooner or later in dysfunctional markets. And I find that regardless of how bad things were beforehand, or how light the resulting regulation, the response from AnCaps is always "You touched it, you bought it!"
Nonetheless, the history of Standard Oil is a pretty compelling example of a natural monopoly.
>If the cost of laying cables is an inhibiting factor for the first company, then it is also the inhibiting factor for any companies which follow.
The difference is the potential ROI for each market entrant.
For the first company, the entry cost may be high, but since there'll be no competition, there's potential for decent profits.
The second company faces the same entry cost, but they also have to compete with the first company, so their potential profits are much lower.
As a result, those who might disrupt the market are much more likely to invest elsewhere.