...Making it extremely unprofitable to start a new exchange, since it will be completely outcompeted in terms of price?
If the price is high, that will encourage people to sell their Bitcoins there, bringing the price back down. If the price is low, that will encourage people to buy Bitcoins there, bringing the price back up.If Bitcoins are selling for $11 at Gox and nobody is selling at some new exchange, I can list my coins for $15 at that exchange if I want, but nobody will buy. If I want to sell my coins (and if I didn't, why would I bother listing them), I'll have to at least roughly match the price at other exchanges.
Interestingly, price offsets between exchanges are a good measure of the health of exchanges. For example, say there are two roughly comparable exchanges, A and B. Their prices will track pretty well as arbitragers balance it out. But say exchange A has some kind of problem and isn't making payouts as quickly and reliably as B. The price at exchange A will increase as people are willing to sell coins for less at B just because they can get their money out more easily.
