> This buy-up argument is impossible in a free market.
On the contrary it is an inevitable risk to any commodity that can be monopolized.
The monopolist can make more from the resource because he will be able to charge more than the current owner. Thus he can offer the current owner more in cash than the owner could ever make renting it. If the owner is a rational actor he will always sell out to the monopolist.
In your analogy, the holdout charges $2.50 rent, the monopolist plans to charge $1000. The monopolists borrows 100 years rent and offers it to the holdout who, being rational, sells. The holdout makes more money, the monopolist makes more money. Only the tenant looses.
It is that way with every commodity that can be cornered. That is why we need to enforce anti-trust laws.
In the event the current owner did not sell, the monopolist could use part if his holdings to eliminate his competitor by selling at a loss. So stretching your analogy, he could use rent from distant apartments to offer discounts on those near his competitors until his competitor goes broke.
On the contrary it is an inevitable risk to any commodity that can be monopolized.
The monopolist can make more from the resource because he will be able to charge more than the current owner. Thus he can offer the current owner more in cash than the owner could ever make renting it. If the owner is a rational actor he will always sell out to the monopolist.
In your analogy, the holdout charges $2.50 rent, the monopolist plans to charge $1000. The monopolists borrows 100 years rent and offers it to the holdout who, being rational, sells. The holdout makes more money, the monopolist makes more money. Only the tenant looses.
It is that way with every commodity that can be cornered. That is why we need to enforce anti-trust laws.
In the event the current owner did not sell, the monopolist could use part if his holdings to eliminate his competitor by selling at a loss. So stretching your analogy, he could use rent from distant apartments to offer discounts on those near his competitors until his competitor goes broke.