Is equating market share to market power a sound economic principle?

Ciara Whelan

Open Access publications from School of Economics, University College Dublin

Abstract: There is a long history of mapping market structure into market power in economic analysis. This paper addresses the validity of this principle for both homogenous and differentiated products industries. While mapping market share dominance into market power may be acceptable for homogenous goods as a rule of thumb, it is by no means a robust result. In the case of differentiated products industries, there is no theoretical foundation for such a mapping. This paper highlights the need to move towards a structural approach to assessing market power in industries.

Keywords: Market shares; Homogenous and differentiated products industries; Market power; Market share; Industrial organization (Economic theory); Commercial products (search for similar items in EconPapers)
JEL-codes: K2 L11 L25 L40 L81 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in: Journal of the Statistical and Social Inquiry Society of Ireland, 32() 2003

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http://hdl.handle.net/10197/136 Open Access version, 2003 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ucn:oapubs:10197/136

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