The Notion of Market Power in the Italian Marginalist School: Vilfredo Pareto and Enrico Barone

Abstract

The paper deals with the notion of market power in the writings of two well-known Italian marginalists: Vilfredo Pareto (1848-1923), and Enrico Barone (1859-1924). It brings into focus the two economists' definition of the sources of market power, the kind of entry barriers the identified, and the role they attributed to potential competition. It shows that even if Pareto and Barone did not provide original analytical contributions to the solution of the models of price determination in imperfectly competitive markets, they should still have a place in the history of the theory of non-competitive markets for their theoretical innovations concerning the causes of market power.

Keywords: Market power, marginalism

JEL Classification: B13, D4