Competition among the Few: Oligopoly and Similar Market Structures

Competition among the Few: Oligopoly and Similar Market Structures

Competition among the Few: Oligopoly and Similar Market Structures

Competition among the Few: Oligopoly and Similar Market Structures

Excerpt

Fewness is an important characteristic of the contemporary economic scene. Many prices and wage rates are determined under conditions which are neither atomistic nor monopolistic. They are determined under conditions of fewness: a few decision-making units shape their policies in view of how they mutually react to each other's moves.

Fewness, however, is not a new phenomenon nor an all-pervading characteristic. In the past, even after the abolition of most mercantilistic restrictions, the spatial isolation of producers must have had a very significant restrictive effect on competition. In some fields of activity it still has this effect. Furthermore, economics of large scale as well as "artificial" methods of excluding competitors, have resulted in fewness even in broad and integrated market areas. But there are important economic relations which are not carried on in circumstances of fewness. Many markets operate under the more anonymous conditions prevailing when the single decision-making units are of negligible significance in relation to the market. This remains true in spite of the fact that, on these markets, attempts at organizing quasi-monopolistic groups with outside help are rather common.

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