Notes_5_Jan - Market Structure, Conduct and Performance...

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AEB 3300 1 Market Structure, Conduct and Performance Module 1 Module 1 Notes 5 Notes 5 Chapters 12-13 Chapters 12-13
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AEB 3300 2 Concentration Ratios As A Measure Of Structure Crude measure of market power Percent of output produced by the largest firms (e.g., CR 4 =output of 4 largest firms) A high concentration ratio indicates that a few firms produce most of the industry output
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AEB 3300 3 Concentration Ratios Not necessarily equal to market power Foreign competition, low entry barriers CR 4 > 50% concentrated industry (oligopoly) Of the 47 food processing industries, over 20 have a CR 4 > 50% E.g., Breakfast cereals: CR 4 = 80%
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AEB 3300 4 Supply Chain Studies Analysis of Contracts and Strategic Alliances Transaction Costs Asset Specificity Opportunism Bounded Rationality Market margins Value Chain studies
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AEB 3300 5 Institutional Analysis Evaluation of Institutional Context What are the barriers to entry? What are the limits to growth/participation?
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Notes_5_Jan - Market Structure, Conduct and Performance...

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