英文版产业经济学教程第2章(2)

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ECNU Oriental Real Estate College

Chapter 2 Market Power

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第一部分主要讨论垄断性行为——单一产 品和多产品定价、质量选择、价格歧视、 纵向控制等。 这些部分较一般的讨论垄断力量的运作， 即只要企业拥有一定程度的市场力量下的 行为，并不要求它拥有完全的垄断地位。 这里考察的大部分情况即使在存在竞争者 的情况下也会出现。

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2.1 Measure of market powerWhat is market power?Simply,market power may be defined as the ability to set prices above cost, specifically above incremental cost or marginal cost, that is, the cost of producing one extra unit. In some maening, central questions of IO are Is there market power? How do firms acquire and maintain market power? What are the implication of market power? Is there a role for public policy regarding market power?

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Monopoly pricing m p monopoly price Objective function: max π= R- C first-order condition: dπ/ d p = 0 m m m m so p - C’(D(p )) = - D(p ) / D’(p ) Common expression:MR=MC

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Lerner index (Abba Lerner,1934)derived from first-order condition (elasticity rule):

L MC) / 1/ε ε is demand elasticity wherein monopoly price (positive value) ε= (dD/dp)*(p/D) Lerner index can be used to measure all kinds of firms’ market power.

p m=(

p m=

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Lerner index of monopoly firmppm

Marginal gross profit

Lerner index is similar as rate of marginal gross profit.D MR

MC

In more cases, we use similar score to measure Lerner index,namely use unit cost replace MC

Q

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Monopoly price must in area wherein ε>1 Why?

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ε is in inverse ratio with monopoly power(垄断势力)p p

p

m pm MC MC q q m

q q m

ε in left chart is lower than in right’s

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Monopoly and monopoly force It seems that εis more reasonable than market share used to define monopoly force. For example, in the chart 2.1,firm in the left has 90% market share while the right has 100%,perfect monopoly. So, according to market share index, the right firm is closer to the position of monopoly firm, but in monopoly force angle, is the left. And εdepends on much factors, some is static and others are dynamic.

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Table 2-1 Lerner index of some industries in USA行业 勒纳 指数 行业 勒纳 指数 谷类产品 0.717 奶油 0.500 软饮料 0.595 麦芽饮料 0.489 浓缩炼奶 0.593 香烟 0.426 蒸馏水 0.571 人造冰 0.380 炒咖啡 0.507 冰淇淋 0.332

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2.2 Source of market power Control scarce resource Seek supports of stake-holders, such as forbiddon of market entry Some anti-entry strategy (example of USA airline) Economy of scale and scope Learing effect R&D

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2.3 Welfare analysis of market power General welfare or general surplus equals to consumer surplus plus suppliers surplus. When consumer price equals to MC, general surplus is maximal. Deadweight loss represents only what we can

get when transformed from monopoly to perfect situation. It sets the upper limit for efficiency through rectifying monopoly pricing.

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Consumer Surplus Dupit(1844) firstly introduced another name:Marshall consumer surplus-

S =n

∫

p p0

D (p)dp

p represents choke-off price(阻断价格), namely minimum price with no demand. S n is nest consumers surplus. And general CS equals to S n plus payment p 0D( p 0).

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Measure of consumer surplus

Another maening of demand curve:

p = f

1

(Q )

p0q = D (p)

Reservation price CS:the part that consumers would like to pay for than actual payment In continuous function assumption, CS = area of triangle

q

0

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Suppliers surplus SS is defined as manufacturer’s profit in this industry. Profit equals to sales income subtracts cost, and cost is the integral of marginal cost. So industry profit equals to the area between marginal curve p 0. and horizontal curve of

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Comments on market powerⅠNest CSdeadweight lossMC

pm pc

D MR

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度量标准的问题 使用CS和SS的前提是需求和供给曲线不仅代表私人 收益和成本，而且代表所有的社会收益和成本。如果 存在外部性，情况就不同了。 当使用总剩余变化的衡量标准时，意味着我们不在意 收益在消费者和生产者之间的分配。但这个假设并不 一定能被广泛接受，例如人们可能认为消费者剩余的 增加比生产者剩余的增加更重要。

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Comments on market powerⅡ Liebenstein,1966 X- inefficiencyX- inefficiency exists in any organization, namely producing under production possibility curve. Monopoly firms have no incentive to reduce cost, and X- inefficiency in it is more serious than in competitive case. High cost can be partly imputed to consumers through its monopoly force. Example in our country:telecom industry,

electric power industry etc.

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Comments on market power Ⅲ Only if positive monopoly profit exists, firms have the incentive to grab, maintain and use market power spending some of the profit. That’s so-called rentseeking activities. Posner,1957 Rent dissipation theory If rent seeking activities is competitive, in zero-profit equilibrium, Tullock Quadrangle is dissipated utterly. Baumol,1990 In different institutions, entrepreneurship may be productive, unproductive even destructive. Monopoly profit is a kind of rent essentially. Rent seeking activities will reduce general social welfare. The largest harm of monopoly especially institutional monopoly may be that it distorts peoples behaviors and brings on nonproductive or destructive activities.

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Deadweight D

= △ ABE

(Harberger triangle, 1954) Experiential study shows Deadweight loss measured by Harberger triangle is lower than 1% of GNP. Rent seeking activities: direct nonproductive activities to get rent of Tullock Quadrangle (OAEP) (Tullock,1967)

p

E

O Constant MC = 0

A

B

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Payout of ren

t-seeking Strategic payout Managing payout

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