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Overcoming Bias Commenter's avatar

This is indeed what efficient capital markets accomplish. However, I suspect that production in factories suffers some of the same difficulty as the real estate market. No two houses are really the same, and the value of a particular house is not the same to any two people looking at it. Thus we don't find effective 'commodity' markets in real estate, their is all sorts of room for extremely local expertiese to produce profits for extremely local traders, and there is little substitute when shopping for a house to spending lots of time looking at lots of houses.

I wonder if it is somehow similar with factories, that the 'trade secrecy' of good and bad factories alike, plus the vagaries and variations of 100s of inputs to the factory across the land- and mind- scapes leave it an intrinsically inefficient market, a market where the information needed to make it more efficient is vast and expensive to acquire?

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Overcoming Bias Commenter's avatar

Why would I want to drive out my competitors? I could do what Toyota did for a long time -- slightly undercharge the competition, and take home the rest as profit.

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