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Tuesday, October 13, 2009

Wasteful competition

Singapore can give a good case study about wasteful competition. Some examples to be studied are:

a) Multiple set-top boxes to watch different pay TV channels
b) Multiple cash cards for travel and merchants
c) Public transport operated by two large operators

The competition led to duplication and waste. Consumers are inconvenienced. Merchants are not willing to accept the new mode of cashless payments, due to the need to install multiple gadgets. The public transport network is not convenient for consumers, especially the last mile.

There is a case for these functions provided by the state or by a regulated monopoly. Some countries adopt the concept of regulated monopoly, which can work well under proper management.

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