Negotiating power vs. market power: lessons for business and conclusions for politics

Stanislav Spektor (), Ekaterina Nazarova () and Rafael Akhtemzyanov ()
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Stanislav Spektor: Department of Economics, Lomonosov Moscow State University
Ekaterina Nazarova: Department of Economics, Lomonosov Moscow State University
Rafael Akhtemzyanov: Department of Economics, Lomonosov Moscow State University

No 59, Working Papers from Moscow State University, Faculty of Economics

Abstract: The distinction between the concepts of market power and bargaining power is not only a methodological, but also a practical problem. The paper describes the currently existing approaches to understanding these phenomena. An attempt has been made to include not only market power, but also bargaining power in the theoretical model. In addition, game-theoretic models of interaction between market participants with an asymmetric distribution of market power and bargaining power between them are considered. Also in the work in the context of the ratio of bargaining power between agents one of the classical economic experiments is considered. The article describes real situations in which a correct understanding of market power and bargaining power was very important for making a decision on the need to apply antitrust regulation measures. Antimonopoly regulation is currently focused on considering only market power, however, when determining the justification for the use of certain influences, it should be borne in mind that manifestations of market power may be similar to the effects of asymmetry in the distribution of bargaining power, and it is also necessary to clearly distinguish between these phenomena. At the same time, an individual approach is required for each case to assess the impact on public welfare of both the phenomena themselves and the regulatory influences applied. Length: 33 pages

Keywords: market power; bargaining power; antitrust policy; competition; bilateral monopoly; experimental economics (search for similar items in EconPapers)
JEL-codes: K21 L40 L41 L50 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-com, nep-gth, nep-inv and nep-reg
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