Introduction: Market Structure and Efficiency

Introduction: Market Structure and Efficiency Rev Ind Organ (2012) 40:85–86 DOI 10.1007/s11151-012-9335-y Introduction: Market Structure and Efficiency Victor J. Tremblay Published online: 25 January 2012 © Springer Science+Business Media, LLC. 2012 Identifying the relationship between market structure and efficiency has been a central theme in industrial organization. Early followers of the structure-conduct-performance tradition tried to uncover a clear link between market structure and economic perfor- mance. Unfortunately, decades of empirical and theoretical research has established that there is not a consistent and unambiguous mapping from structure to performance. Although empirical studies generally find a positive relationship between industry concentration and profitability, the relationship is weak statistically. In addition, game theoretic models show that there are situations under which monopoly and imperfectly competitive markets behave efficiently. Context matters in that industry characteris- tics, as well as market structure, influence performance. This motivated a resurgence in case studies of individual industries in place of the inter-industry studies that were done in the past. This series brings together papers that address estimation issues and investigate the relationship between market structure and efficiency from the perspective that industry characteristics matter. The primary focus is on static efficiency or market power. In the first paper, Stephen Martin provides a http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Introduction: Market Structure and Efficiency

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Publisher
Springer US
Copyright
Copyright © 2012 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-012-9335-y
Publisher site
See Article on Publisher Site

Abstract

Rev Ind Organ (2012) 40:85–86 DOI 10.1007/s11151-012-9335-y Introduction: Market Structure and Efficiency Victor J. Tremblay Published online: 25 January 2012 © Springer Science+Business Media, LLC. 2012 Identifying the relationship between market structure and efficiency has been a central theme in industrial organization. Early followers of the structure-conduct-performance tradition tried to uncover a clear link between market structure and economic perfor- mance. Unfortunately, decades of empirical and theoretical research has established that there is not a consistent and unambiguous mapping from structure to performance. Although empirical studies generally find a positive relationship between industry concentration and profitability, the relationship is weak statistically. In addition, game theoretic models show that there are situations under which monopoly and imperfectly competitive markets behave efficiently. Context matters in that industry characteris- tics, as well as market structure, influence performance. This motivated a resurgence in case studies of individual industries in place of the inter-industry studies that were done in the past. This series brings together papers that address estimation issues and investigate the relationship between market structure and efficiency from the perspective that industry characteristics matter. The primary focus is on static efficiency or market power. In the first paper, Stephen Martin provides a

Journal

Review of Industrial OrganizationSpringer Journals

Published: Jan 25, 2012

References

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