Monday, March 22, 2010

Creative destruction and antitrust

i am sure that former student John Tamny would have some choice words for me if he knew that I was investigating (when I was chief economist at the FTC) the proposed Blockbuster-Hollywood Video merger when they decided to abandon it. often happens as companies grow, Blockbuster concentrated on perfecting its existing service while beating competitors offering the same instead of looking into ways that outsiders might destroy its business model altogether. Schumpeter long ago noted that entrepreneurs disrupt: For Blockbuster, the "disrupter" in question was Netflix.

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