Information Fusion Research

Strategic market power of firms in imperfect markets

T.V.S. Ramamohan Rao

Indian Institute of Technology

DOI: https://doi.org/10.59429/ifr.v2i1.6298

Keywords: imperfect markets; market power; market shares; non-price strategies

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Abstract

Studies dealing with the market power of a firm depend on the elasticity of demand even when market imperfection is acknowledged. This study suggests that a firm derives its market power due to its interface with consumers on the market as well as its interaction with rival firms on the market. As a result, its market share and market power over a unit of sales in the industry require attention in the context of imperfect markets. Similarly, non-price strategies of firms offer some market power that should be incorporated in the definition. Thus the modified market power indices are a significant contribution to the theoretical results.

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