Topic
Market power
About: Market power is a research topic. Over the lifetime, 11444 publications have been published within this topic receiving 288749 citations. The topic is also known as: dominant market position.
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TL;DR: In this paper, the potential of post-contractural apportunistic behavior for improving market efficiency through intra-firm rather than interfirm transactions is examined under the assumption that vertical costs will increase less than contracting costs as specialized assets and appropriable quasi rents increase.
Abstract: The potential of post-contractural apportunistic behavior for improving market efficiency through intrafirm rather than interfirm transactions is examined under the assumption that vertical costs will increase less than contracting costs as specialized assets and appropriable quasi rents increase. Vertical integration protects against the risk of contract cancellation and can create market power which is not generally referred to as monopoly. Contracts used as a alternative provide economically enforceable protection against opportunistic behavior. Solutions to opportunistic behavior problems can include joint ownership of common assets and condominium ownership of services. Economies of scale are major factors in some businesses, such as insurance. The complexities of ownership relations makes it difficult to assign higher costs to either the contract or vertical-integration approach. This suggests that economic analysis should be used to identify which is most advantageous for specific kinds of activities.
5,728 citations
TL;DR: A review of the scientific literature on the market for corporate control can be found in this paper, where the authors argue that corporate control is best viewed as an arena in which managerial teams compete for the rights to manage corporate resources.
3,821 citations
TL;DR: In this article, a causal ambiguity inherent in the creation of productive processes is modeled by attaching an irreducible ex ante uncertainty to the level of firm efficiency that is achieved by sequential entrants.
Abstract: Causal ambiguity inherent in the creation of productive processes is modeled by attaching an irreducible ex ante uncertainty to the level of firm efficiency that is achieved by sequential entrants. Without recourse to scale economies or market power, the model generates equilibria in which there are stable interfirm differences in profitability, an above-normal industry rate of return, and a lack of entry even when firms are atomistic price-takers. The free-entry equilibrium for rational noncollusive firms is characterized for atomistic firms and for firms of fixed size, and some analytic results are obtained for the more realistic case in which firms have an arbitrary cost function. Numerical results for the associations implied between concentration, industry profitability, fixed entry costs, and the dispersion of firm profitabilities are obtained for selected cases.
2,513 citations
TL;DR: For example, Calmfors and Driffill as mentioned in this paper show that the worst outcomes with respect to employment may well be found in systems with an intermediate degree of centralization (such as in Belgium and the Netherlands).
Abstract: Centralization of wage bargaining
Lars Calmfors and John Driffill
The structure of labour markets is increasingly perceived as a determinant of the macroeconomic performance of a country. This article focuses on one aspect of labour markets, the degree of centralization of wage setting. The main conclusion is that extremes work best. Either highly centralized systems with national bargaining (such as in Austria and the Nordic countries), or highly decentralized systems with wage setting at the level of individual firms (such as in Japan, Switzerland and the US) seem to perform well. The worst outcomes with respect to employment may well be found in systems with an intermediate degree of centralization (such as in Belgium and the Netherlands). This conclusion is reasonably well supported by the available empirical evidence. It is also logical. Indeed, large and all-encompassing trade unions naturally recognize their market power and take into account both the inflationary and unemployment effects of wage increases. Conversely, unions operating at the individual firm or plant level have very limited market power. In intermediate cases, unions can exert some market power but are led to ignore the macroeconomic implications of their actions. These conclusions challenge the conventional wisdom which asserts that the more ‘corporatist’ is an economy, the better is its economic performance.
2,027 citations
TL;DR: In this paper, the authors analyze a model of imperfect price competition between intermediation service providers, and analyze in detail the pricing and business strategies followed by intermediation services providers, showing that efficient market structures emerge in equilibrium, as well as some specific form of inefficient structures.
Abstract: We analyze a model of imperfect price competition between intermediation service providers. We insist on features that are relevant for informational intermediation via the Internet: the presence of indirect network externalities, the possibility of using the nonexclusive services of several intermediaries, and the widespread practice of price discrimination based on users' identity and on usage. Efficient market structures emerge in equilibrium, as well as some specific form of inefficient structures. Intermediaries have incentives to propose non-exclusive services, as this moderates competition and allows them to exert market power. We analyze in detail the pricing and business strategies followed by intermediation services providers. Copyright 2003 by the RAND Corporation.
1,629 citations