Static Market Power

Rafael Macatangay (Lead / Corresponding author)

Research output: Chapter in Book/Report/Conference proceedingEntry for encyclopedia/dictionary

Abstract

Static market power refers to the ability of economic agents profitably to move prices away from competitive levels during one time period. Market power, a form of market failure, prevents the achievement of an efficient allocation of resources. The simplest example of market power is monopoly, a market in which there is only one firm. Another example of market power is oligopoly, a market in which there is a small number of firms. The determination of whether or not prices profitably deviate from competitive levels is at the heart of antitrust law and economics. Methods for analysing the unilateral change in incentives arising from merging two firms have become influential as a screening device for identifying potentially anti-competitive mergers in the EU, US, and UK.
Original languageEnglish
Title of host publicationEncyclopedia of Law and Economics
EditorsAlain Marciano, Giovanni Battista Ramello
Place of PublicationNew York
PublisherSpringer
ISBN (Electronic)9781461478836
DOIs
Publication statusPublished - 2015

Keywords

  • Market Power
  • Competition Authority
  • Cournot Model
  • Oligopoly Model
  • Merging Firm

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    Macatangay, R. (2015). Static Market Power. In A. Marciano, & G. B. Ramello (Eds.), Encyclopedia of Law and Economics Springer . https://doi.org/10.1007/978-1-4614-7883-6_458-1