Indeed, they see divergent patterns emerge when it comes to companies and products. The researchers analyzed newly available data from MRI-Simmons, a provider of attitudinal and behavioral US consumer insights, to reexamine and reassess trends in concentration in US product markets between 19. When there are fewer players producing goods and services, does it follow that there are fewer goods and services to choose from-and therefore less choice for consumers in terms of prices?
Monopoly economics definition economics free#
Three major antitrust laws have been passed by Congress over the past century, all aimed at prohibiting price-fixing, preventing monopolies, and driving free competition as the rule of trade.īut the discussion about concentration has traditionally centered on the number of companies operating and competing in different segments, with less attention paid to the situation at the individual product level. Thus, US legislators have historically sought to limit the market power of large corporations. This kind of excessive market power can also lead to less innovation, losses in quality, and higher inflation. When markets are dominated by a small number of big players, there’s a danger that these players can abuse their power to increase prices to customers. Monopolies are generally considered to be bad for consumers and the economy. The researchers find abundant evidence of rising concentration at the broader market level, with more mergers, fewer players, and a rise in organizations with high market share.īut they find a different picture at the level of individual products, where more concentration has led to more competition.
Lanier Benkard and Ali Yurukoglu and Chicago Booth’s Anthony Lee Zhang provide more support for this claim-in part. In July 2021, the White House issued an executive order and statement doubling down on antitrust law enforcement, with a promise to reign in “corporate consolidation” and “bad mergers” in the interest of US consumers.Ī growing body of research supports this notion, pointing to a regulatory leniency over the past few decades that is driving concentration across US markets and segments. Both Republican and Democratic politicians have been sounding alarms about market power in the United States, arguing that a few companies such as Amazon, Facebook, and Google have become too dominant.
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