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The Aggregate Implications of Market Power

Descrizione del progetto

Misurare la realtà del potere di mercato

La capacità di un gigante aziendale di controllare il prezzo di mercato di beni o servizi fa riferimento al suo potere di mercato. In teoria, è così che un’azienda riesce a mantenere i prezzi al di sopra dei costi marginali aumentando o limitando l’offerta o la domanda. In pratica, può limitare la produzione, soffocare l’innovazione e creare inefficienze nell’assegnazione della produzione. Il potere di mercato può avere implicazioni sia microeconomiche che macroeconomiche. Il progetto M-POWER, finanziato dall’UE, esaminerà l’estensione e l’effetto del potere di mercato in tutti i settori, regioni e paesi. Per quantificare gli effetti, il progetto utilizzerà nuove tecniche per documentare le maggiorazioni tra le società dell’intera economia e analizzare le implicazioni sia per i produttori che per i consumatori.

Obiettivo

It has been long understood by economists that market power can negatively affect welfare by limiting output, stifling innovation, and introducing inefficiencies in the overall allocation of production. On the one hand, there is ample evidence from case-studies, that the presence of market power, in the form of explicit or implicit cartels and other practices of anti-competitive behavior, can lead to substantial damages to producers and consumers in a given market. On the other hand, very little is known about the broad cross- sectional and time-series patterns of market power across sectors, regions and countries. In addition, and perhaps more importantly, if market power is at all present, does it affect so-called aggregate outcomes in the product and factor markets? For example should the analysis of productivity growth and investment take into account the presence of market power, and does market power play a role in labor market outcomes, such as e.g. in the recently reported decline in the labor share across a variety of countries? This project aims to fill the gap in the literature by applying recently developed techniques to, first of all, systematically document markups, across firms in the entire economy, and secondly, to analyze the implications for producers and consumers in the economy at large, including both product and input markets. While the macroeconomic literature on misallocation has considered a variety of distortions that affect the allocation of inputs across plants, the project introduces an empirical framework to quantify the welfare loss from market power. Special attention is given to the impact on productive inefficiency. The overall aim is to better understand, and quantify, how market power affects the allocation of resources in the context of heterogeneous producers, and empirically quantify the trade-off of price and cost effects.

Meccanismo di finanziamento

ERC-COG - Consolidator Grant

Istituzione ospitante

KATHOLIEKE UNIVERSITEIT LEUVEN
Contribution nette de l'UE
€ 1 575 000,00
Indirizzo
OUDE MARKT 13
3000 Leuven
Belgio

Mostra sulla mappa

Regione
Vlaams Gewest Prov. Vlaams-Brabant Arr. Leuven
Tipo di attività
Higher or Secondary Education Establishments
Collegamenti
Costo totale
€ 1 575 000,00

Beneficiari (1)