Identifying Market Power in Times of Constant Change

17 Pages Posted: 3 Apr 2017

See all articles by Janice Alane Hauge

Janice Alane Hauge

University of North Texas

Mark A Jamison

University of Florida - Warrington College of Business Administration, Public Utility Research Center

Date Written: August 15, 2017

Abstract

We explain that traditional approaches to defining markets to investigate market power fail in times of rapid technological change because demand and supply are in constant flux. Currently, empirical analyses of markets rely upon historical data, the value of which degrades over time, possibly resulting in harmful regulatory decisions. This points to a need for a different approach to determining when regulation is an appropriate response to market power. We present an approach that relies upon essential factors leading to monopoly (EFs), such as control of essential resources, which persist across generations of products. Market power analyses should be a search for EFs and policy responses should focus on diffusing the market power without destroying value. Our research constructs a theoretical model to illustrate the decay problem and the value of the EFs approach, and uses the telecommunications industry to illustrate our approach.

Keywords: Competition, Market Power, Regulation, Antitrust

JEL Classification: L12, L43, L51, L86, L96

Suggested Citation

Hauge, Janice Alane and Jamison, Mark A., Identifying Market Power in Times of Constant Change (August 15, 2017). Available at SSRN: https://ssrn.com/abstract=2944458

Janice Alane Hauge (Contact Author)

University of North Texas ( email )

1155 Union Circle #305340
Denton, TX 76203
United States
940-565-4544 (Phone)

Mark A. Jamison

University of Florida - Warrington College of Business Administration, Public Utility Research Center ( email )

PO Box 117142
Gainesville, FL 32611
United States
352-392-6148 (Phone)
352-392-7796 (Fax)

HOME PAGE: http://warrington.ufl.edu/purc/facultyinfo.asp?WEBID=1217

Register to save articles to
your library

Register

Paper statistics

Downloads
22
Abstract Views
59
PlumX Metrics