When I was in grade school, fights would occasionally break out on the playground. The commencement of these fights was usually hard to predict: one boy would make a remark to another boy that he did not like, the words would become more heated and then a fight would erupt. Fortunately, these fights usually subsided quickly with no one hurt. Fights between firms can also occur. It is usually in firms’ interests to cooperate and keep prices high. Despite this, firms sometimes engage in ruinous price wars. Although often as unpredictable as schoolyard skirmishes, fights between firms are sometimes a bit more predictable. Here’s how.
In an earlier article I discussed how the regulation of Beijing’s taxi fares had taken taxis off the road. Recently there has been a spate of mobile applications (mobile apps) to address this problem: DiDiDaChe and YaoYaoZhaoChe in Beijing, KuaiDiDaChe in Hangzhou, and DiDi and KuaiDi in Shanghai and Guangzhou. Although varying slightly, these apps […]