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Unformatted text preview: into London. A broker inspects his box, and can reject it altogether; but he cannot start quibbling about the
selection he has got. 79
ECO 204 Chapter 16: Analysis of Firms with Market Power (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. W elcome to the mad world of De Beers, where James Bond meets the Wild West and manages to turn the raw, la wless
frontier world of diamond digging and dealing into the most smoothly manipulated business in the world —"all", as Lord
Randolph Churchill famously observed when he visited the South African diamond mines in the 1890s, "for the vanity of
woman" (and, today, of man). It is not merely gems that De Beers is selling, but symbols, myths, magic. As a worldwide
dealer in enchanting illusions, Disney has nothing on De Beers: for the preciousness of the diamond is not a fact but a
triumph of modern marketing.
A cartels best friend
The allure of diamonds rests on one illusion above all: that "a diamond is forever". That clever marketing slogan, first
invented in 1947 by De Beers’s Am...
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