L. Peter Deutsch writes:
 > > God knows I don't want to get too far into this brawl, but it's at least
 > > worth pointing out that this, like the statements it intends to refute, is
 > > just hand-waving.  It's an assertion every bit as unfounded as the ones to
 > > which it is a response.  I don't say it's false, just that it's a little
 > > odd coming from someone who keeps demanding -- justly -- that his
 > > correspondents give evidence for everything they say.
 > 
 > That's fair.  As a start, look at the prices charged by the various Linux
 > distributors, and the sizes of their development staffs.  Red Hat is the
 > most expensive, and has the largest staff.  (I hope someone will correct me
 > if I get any facts wrong.)  Of course, that doesn't speak directly my claim
 > that competition will eventually bring *all* their prices down to the point
 > that the surplus won't support a significant development staff, but it's
 > suggestive evidence.

It depends on what the transaction costs are.  If it's more expensive
to evaluate competing distributions of Linux, and if Redhat has a
reputation for quality products, they could quite reasonably get away
with charging more, and providing more.

It seems unfair or unwise to base a business plan on friction in the
market, but Pennzoil happily runs a business based solely on friction
in engines.  Remember, it's in the *long* run that competition brings
prices down to cost.  The smart entrepreneur looks for higher-friction 
areas to move into.  That's why free markets work so well -- because
the worst problems bring the highest profit, and in time the profits
go away, causing a search for more problems to address.

-- 
-russ nelson <nelson@crynwr.com>  http://russnelson.com
Crynwr sells support for free software  | PGPok | Government schools are so
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