Dominant Market Position and Ordoliberalism
published on International Review of Economics, Volume 62, Issue 4, pp 291-306 (2015)
18 Pages Posted: 29 Mar 2015 Last revised: 10 Dec 2015
Date Written: July 8, 2015
The ordoliberal distinction between performance competition and impediment competition may improve the understanding of the European distinction between a “dominant position” and an “abuse” of that position. Using a simple game-theory framework, I illustrate the dominant firm as a firm with, among other things, a dominant strategy in performance competition. If, due to the impediment condition, the dominant firm abandons its dominant strategy in the performance competition, then this firm is conducting abusively.
In other words, the dominant firm should behave as-if it did not have economic power. It is the formulation of the ordoliberal as-if standard. As I show, such an ordoliberal standard leads to a wider concept of dominance that not only includes the economic domain but also considers the impact of private economic power on the political sphere.
Keywords: Ordoliberalism, Market Power, Dominant Position
JEL Classification: B13, B2, K21
Suggested Citation: Suggested Citation