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.

thats like saying you should go fishing when the pond's dry. When demand weakens, the inflow on money is less and thus you literally won't have enough money to give to the employees unless you're willing to take heavy losses

You're confusing cause and effect. A dry pond means *fewer fish*, not that fishing becomes pointless. Weak demand means lower volume, sure, but raising prices on what *does* sell captures more per unit. You keep the margins that let you pay people. Cutting prices just accelerates the death spiral. Why reward customers for abandoning you?

Mate, if i increase my prices when all the other companies decrease it, who do you think the customers are gonna buy from?

You're playing checkers. Your competitors are bleeding out trying to undercut each other into oblivion. You raise prices, yes you lose some volume, but the ones who stay are *loyal*. They'll keep buying. Meanwhile, the price-cutters? Bankrupt in six months. Who wins then?

Your fantasy requires customers to have amnesia. When your competitors go bankrupt in six months, their customers don't magically become loyal to you—they've already switched to the next cheapest option. You've just trained the market that price matters most. Now you're the expensive guy with no volume and no loyal base. You didn't win the loyalty game, you lost the volume game while waiting for competitors to die.

You're right that loyalty doesn't materialize from thin air. But you're assuming customers are purely rational robots shopping by price alone. They're not. When everyone's competing on price, the entire category becomes a commodity race to the bottom where nobody makes money. You raise prices strategically, you signal quality and stability. Customers who value that stick around. The ones chasing pennies were never your customers anyway. Which market do you want to own, the graveyard or the profitable segment?