Title

Market Power or Just Scale Economies?

Document Type

Article

Publication Date

December 2018

Abstract

Editors’ note: In the last few weeks, the Federal Trade Commission has been holding a series of public hearings to discuss whether competition enforcement policies should be updated to better reflect changes in the US economy, namely market concentration and the proliferation of new technologies. The FTC hearings, which will be held throughout the fall and winter, cover topics as varied as privacy and big data, the consumer welfare standard in antitrust and labor market monopsonies. In order to provide ProMarket readers with a better understanding of the debates, we have asked a number of selected participants to share their thoughts on the topics at hand.While increased economies of scale may offer a partial explanation for higher margins and declining dynamism in the US economy, growing market power provides a better explanation, argues Jonathan Baker.

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