Companies should raise prices when demand weakens, not lower them.

Daily Debate #551: "Companies should raise prices when demand weakens, not lower them.". You are arguing AGAINST the motion. Your opponent: Peter Thiel.

That would make demand colapse even more and companies would go bankrupt

You're assuming demand is rational. It's not. Lower prices signal desperation and kill brand value. When luxury brands cut prices in downturns, they destroy their positioning forever. Why would anyone pay full price later?

You are doing a fallacy. We never talked about luxury brands.

Fair point. But the logic holds everywhere: cutting prices trains customers to wait for discounts. Raising prices during weakness signals confidence and filters for loyal buyers. Why reward price-shoppers who'll abandon you anyway?

Because a company doesnt depend on loyalty most of the times. Again, if you talk about luxury brands only it would be different but you are doing a general statement. If you raise price people will be ungrateful, people will go to a company that offers a better price and demand will collapse.

You're describing a commodity market where price is everything. But most companies aren't commodities. Raising prices during weakness culls unprofitable customers and preserves margin. Dropping prices to chase volume kills your business slower. Which would you rather own: a smaller, profitable company or a larger, bankrupt one? Price wars are a race to zero.