Preprint "Price-fixing in the lab diamond market"💎 The lab-grown diamond industry, initially seen as a force for healthy competition and fair pricing in the diamond market, is now facing its own price-fixing issues. 🧪 - ThreadSky

minniewannie.bsky.social • 48 days ago

Preprint "Price-fixing in the lab diamond market"💎

The lab-grown diamond industry, initially seen as a force for healthy competition and fair pricing in the diamond market, is now facing its own price-fixing issues.

🧪

Comments

commonestman.bsky.social•48 days ago

If the barriers to entry is very low for lab diamonds and the margins that high, market forces should see a proliferation of Labs worldwide and alternate sales channels.

If that isn't happening then it would suggest other factors in play than just price fixing by retailers.

minniewannie.bsky.social•48 days ago

As I explained in the paper, the barrier of entry for lab diamond farms is relatively low, but the barrier of entry for retail lab diamond jewelers is high, especially since customers tend to purchase from large, well-established diamond jewelers.

commonestman.bsky.social•48 days ago

You are right about people preferring to buy from top diamond retailers, than say Etsy.

But I didn't see how that would imply price-fixing. Each retailer has pricing power for those that look at lab diamonds as a lower price alternative and so they price it at whatever the market bears.

minniewannie.bsky.social•47 days ago

The data suggests this is the case, evidenced by the lack of proportional retail price reductions despite significant drops in lab-grown diamond wholesale prices, and jewelers reporting substantially higher profit margins on lab diamonds compared to mined ones.

commonestman.bsky.social•47 days ago

Price fixing requires some kind of collusion or agreement between retailers. There is no data to support this but a conjecture.

On the other hand, such inefficiencies can arise purely from consumer behavior, no competitive shopping, no standardization for comparison, inelasticity of demand, etc.

minniewannie.bsky.social•46 days ago

I'm not sure I follow. Diamond jewelry is highly standardized with the 4C criteria, and all major lab diamond retailers have online stores, making price comparisons straightforward.

minniewannie.bsky.social•48 days ago

The production cost of lab diamonds was around $300–$500 per carat, yet the competitive retail price of a 1-carat lab diamond is $1,890.

🧪💎

minniewannie.bsky.social•42 days ago

Blood diamond suppliers pressure jewelers to avoid lab diamonds, further shrinking the already limited competition in lab diamond jewelry.

🧪 #EconSky

minniewannie.bsky.social•47 days ago

Tiffany, Cartier, and Harry Winston overcharge by 330% for identical stones sold in Costco.

Luxury jewelry is one of the greatest scams of all time.

🧪

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