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

See all articles by Massimiliano Vatiero

Massimiliano Vatiero

University of Trento - Department of Economics and Management; Università della Svizzera italiana

Date Written: July 8, 2015

Abstract

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

Vatiero, Massimiliano, Dominant Market Position and Ordoliberalism (July 8, 2015). published on International Review of Economics, Volume 62, Issue 4, pp 291-306 (2015). Available at SSRN: https://ssrn.com/abstract=2585167 or http://dx.doi.org/10.2139/ssrn.2585167

Massimiliano Vatiero (Contact Author)

University of Trento - Department of Economics and Management ( email )

Via Inama 5
Trento, I-38100
Italy

Università della Svizzera italiana ( email )

Via Giuseppe Buffi 13
Lugano, Ticino 6900
Switzerland

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