Talk:Market power/Archives/2015
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Merge
Should bargaining power be merged in and redirected here? I've heard the term market power used much more when discussing this from the economic theory standpoint. Bargaining power seems to be the layman's term for it. If they are exactly the same concept, does anyone object to making bargaining power a redirect here? But, if people think bargaining power is the more common and accurate term we can move the content there instead. - Taxman 14:33, Oct 15, 2004 (UTC)
Done a major revision. I can't believe Wikipedia didn't have this article before now, I would have written it myself if I had known. I mainly changed the structure, the original content is mainly there. There's still a lot more to do. Most importantly, Chicago school criticisms of the concept need to be described. Also the examples need fleshing out. Psychobabble
- No offense, but the Wal-Mart example that was mostly removed is a much clearer example of the effect of market power on price and at the same time an illustration of the monopsony end of the scale as opposed to the monopoly most people are familiar with. Also it is much more relevant today and less biased towards the techy subjects wikipedia tends to default to. Otherwise very good work. - Taxman 04:50, Oct 16, 2004 (UTC)
- I did leave it there somewhat, but I felt it was over-explained for a general article on market power and, if anything, better suited to an article on monopsony. The lengthy example and the three external links to Wal Mart seemed to place excessive emphasis on the point, such that I felt the article was fairly POV against Wal Mart. I agree that there should be more salient examples, I'll add some as I get around to it. Psychobabble
- Now the POV against walmart I see your point on even though that is not what I was going for. Remove the extra external links, fine. But I disagree that it was overexplained. It makes very clear market power affecting price in a real example. By the way the Rollingstone article would be seen by many as a "good" use of Walmart's power breaking the power of a monopoly--the RIAA. - Taxman 05:37, Oct 16, 2004 (UTC)
- The definition of "Price Taker" here is awkward (at best). A more complete (yet brief) definition based in basic Micro Economic Theory is called for here. See the following text books; 1 of which was used in my Intermediate Micro Economics College Class.
- The definition of "Price Taker" here is awkward (at best). A more complete (yet brief) definition based in basic Micro Economic Theory is called for here. See the following text books; 1 of which was used in my Intermediate Micro Economics College Class.
- Now the POV against walmart I see your point on even though that is not what I was going for. Remove the extra external links, fine. But I disagree that it was overexplained. It makes very clear market power affecting price in a real example. By the way the Rollingstone article would be seen by many as a "good" use of Walmart's power breaking the power of a monopoly--the RIAA. - Taxman 05:37, Oct 16, 2004 (UTC)
- I did leave it there somewhat, but I felt it was over-explained for a general article on market power and, if anything, better suited to an article on monopsony. The lengthy example and the three external links to Wal Mart seemed to place excessive emphasis on the point, such that I felt the article was fairly POV against Wal Mart. I agree that there should be more salient examples, I'll add some as I get around to it. Psychobabble
Should that be monopsonistic power that Wal-Mart has? (Dictionary.com doesn't recognize monopsonic.) RJFoster 19:18, 19 Oct 2004 (UTC)
Agreed. This should read monopsonistic power, not monopolistic, given the example cited. If we make the inference that the low prices Wal-Mart gets from its supplier enable to be the only provider of these low-cost items to its customers, then that sounds monopolistic. --128.143.131.8 (talk) 18:59, 12 August 2008 (UTC)
I am talking a Managerial Economics class at the University of St. Thomas in Minnesota and my class uses the Managerial Economics and Organizational Architecture 3rd edition textbook by Brickley-Smith and Zimmerman. They use a much-different definition of market power:
On page 161 and 184 (and in several other places) the definition is given:
A firm has market power when it faces a downward-sloping demand curve. Firms with market power can raise price without losing all customers to competitors.
You can access the book's web site here: [1]
--Dan 22:17, 18 February 2006 (UTC)
Here are all the definitions I can fine by using a Google define: market power
the power that a firm has in a relevant market in the absence of effective competitive constraints in that market. www.reckon.co.uk/open/Glossary
Ability of a firm or other market participant to influence price by varying the amount that it chooses to buy or sell. 2. Ability of a country to influence world prices by altering its trade policies. www-personal.umich.edu/~alandear/glossary/m.html
Ability of a firm to exercise control over industry prices or output. enbv.narod.ru/text/Econom/ib/str/261.html
The ability of an individual firm to exert control over prices prevailing in the markets for its products or services. The highest degree of market power is associated with a monopoly, although all firms except those in perfectly competitive markets possess some degree of market power. Countries' competition policies generally are aimed at curbing the perceived economic and political costs associated with market power. www.itcdonline.com/introduction/glossary2_i-p.html
The degree to which a firm exercises influence over the price and output in a particular market. Under prefect competition, all firms are assumed to have zero market power. Where market power exists, the producer affects the market price, and so price is not equivalent to marginal costs (Bannock et al., 1992, 274-5). poli.haifa.ac.il/~levi/res/dicpe.html
A firm's ability to charge a price higher than marginal cost, because the market structure is one of imperfect competition or monopoly. media.pearsoncmg.com/intl/ema/ema_uk_he_lipczynski_indorg_2/0273688073_glossary.html
Pricing discretion; the ability of a firm to influence the market price of its product. wps.aw.com/aw_rohlf_econreason_5/0,5759,11635-,00.html
The ability to alter the market price of a good or service. highered.mcgraw-hill.com/sites/0072472006/student_view0/chapter9/key_terms.html
Note that there is not a single definition I can find that indicates that market power is a market failure.
Does anyone have a reference that this market power is in fact defined as a type of "market failure"? --Dan 22:26, 18 February 2006 (UTC)
When we talk of market failure, we mean failure to obtain the outcome that maximises total surplus. If producers with market power use it to increase their surplus (ie profit), it will usually be the case that consumer surplus decreases by a greater amount, so total surplus decreases. Hirschey, Mark & Pappas, James "Fundamentals of Managerial Economics" (5th ed, 1995, Dryden Press) p671 refers to failure by market structure, ie too few firms to generate sufficient competition.