I provide a simple proof that a monopsony must necessarily be a monopoly. This is in contrast to authors who have previously asserted that either no relation exists between monopsony and monopoly, or who have relied upon additional assumptions to make an inference about monopolisitic nature of a...

The dominant view of inflation holds that it is macroeconomic in origin and must always be tackled with macroeconomic tightening. In contrast, we argue that the US COVID-19 inflation is predominantly a sellers' inflation that derives from microeconomic origins, namely the ability of firms with...

We describe a classroom experiment that illustrates the concepts of market power and the Lerner Index. Students are organized in groups, each making a decision for a monopolist. Monopolists face different (unknown) demand curves, each with a different (constant) elasticity. Through repetition,...

This paper considers a dynamic duopoly market with strategic, price setting firms and an infinite set of fully rational, privately informed consumers who enter the market sequentially. I show that there exists a sequential equilibrium in which prices converge to their realized product qualities...

Over the past thirty years, the income gap between capital and labour has widened, a shift accompanied by an increase in dominant firms’ market power. To understand the underlying causes, our study integrates imperfect competition in both product and labour markets, revealing how different...

This paper analyzes competition in a two-period differentiated-products duopoly in the presence of both switching costs and network effects. We show that they have opposite implications on the demand side, specially in the first period. While the former reduces demand elasticities, the latter...

Market power on each side of a multisided platform, whether in the form of increasing prices or decreasing quality, is constrained by the risk of losing sales on the other sides. That tends to weaken market power on each side and encourages platforms to keep prices lower and quality higher than...

This article explores the possibility of associating firm size vis-à-vis industry size with firm-level R&D led-innovation and the resultant impact(s) on industry level output and price. We consider an oligopolistic industry having one dominant firm and some fringes. Innovation by the dominant...