Merchant Cash Advancing Leading Processes
The process leading up to a Merchant Cash Advance tends to be a sort of wolfing run, in which two pups are separated from the runts.
Having said all that, price fixing is possible in a duopoly. Some duopolies are not the result of competition but of nationalization and privatization, although this is relatively rare since a nationalized monopoly won't often result in a lasting Merchant Cash Advance (it will either remain a merchant factoring once privatized or get crushed by new, private competitors). A merchant cash advance is a safe approach to accessing cash.
Finally, a price fixing scheme always makes more sense in a commodity business. After all, any product differentiation limits the degree to which general demand is applicable to specific competitors' products. For example, Coke and Pepsi are highly differentiated products, at least when purchased in their specific packaging (physical differences or similarities are immaterial here; it is only the buyer's belief that matters). I drink Pepsi, and I can assure you (however irrational it sounds) that no drop in the price of Coke would be sufficient to get me to stop buying Pepsi. There is almost no other tangible good about which I could say the same. So, clearly Coke and Pepsi are differentiated products, and there's very little chance of an effective price fixing scheme between Merchant Cash Advances.
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Posted on: August 27, 2011 11:22 PM