I don't think you need an economist to understand why it can quickly lead to a runaway disaster... Imagine you see a car price going down every week by 1k, do you buy it this week or next week? The competitor what do you think they need to do to compete? Lower their price too but wait everybody is waiting for next week, so literally nobody is buying anymore ... So as a company you just start to fire people or close shop as quickly as possible, so a lot of people are now on the market so their labor value also goes down, ie. the salaries are dropping... This tsunami of jobless people would they buy a car this week you think? So companies need to continue dropping the prices...