Conversation

Random thought sparked by some dynamics I’m thinking through for a gig. When your top 2 rivals ally, it’s an sign of your own power, so in a weird way you want to see it happen, and see if you can take on both at once. Test of strength. If you win, your dominance is deepened.
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It’s the flip side of “the enemy of my enemy is my friend” — which is only true if enemy #1 is too big to take on alone. Nobody *wants* alliances with all their inherent compromises and tradeoffs unless forced into them for survival.
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If top 3 players in a contest A, B, and C have strengths of 9, 8, and 7, then B needs a little luck to beat A, and C needs a little luck to beat B, and a lot of luck to beat A. Low incentive to ally. But if the power levels are 9, 5, and 4, B and C *have* to ally to target #1
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The dynamics are governed by the disproportionate rewards of being #1. If you’re say 51% of the market, you enjoy weird premiums. Selling costs plummet. There’s a term for this I’m forgetting… not monopoly rents, but dominance premiums.
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And it can work down the stack, with #2 being disproportionately more rewarding than #3. But the effects wear off sharply past about 3 or 4. 5+ rankings are commodity. Bronze is the last medal.
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