Market power?

//Market power?

Market power?

Author: Katharina Biely

SUFISA is about exploring conditions that farmers face and how they in turn react to them. Indeed, there are many conditions, thus it is needed to focus on a specific area. In the case of SUFISA this focus is on economic conditions. Conditions on the market that farmers face influence their options, their economic viability. Increasing market concentration is one condition that farmers face, which can have negative effects on farmers. Market concentration can imply that certain actors in the market have more power than others. But what does that mean? What does market power imply? To what does this power empower the actor? Is it merely to influence prices or the amount of a good offered? Or are there other ways an actor with market power can influence others?

We took a closer look at the essence of power and market power to come to grips with these fundamental questions. The result can be found in the paper: Market power extended: From Foucault to Meadows.

Abstract: Market power is a complex matter that is approximated with quantitative indicators within economics. However, these indicators may not fully capture market power, or they may fail to identify it, although it may be present. Moreover, a quantitative approach restricts market power as a concept, impeding the ability to discuss its relationship with other concepts, such as sustainability. This paper extends the definition of market power, following Foucault’s understanding of power and the associated theoretical discussions of power from different disciplines. We extended Foucault’s work by including systems thinking to capture the importance of the prevalent system’s paradigm, which is the ultimate initiator of action. Apart from distinguishing different elements of power, we also integrate an instrumental view on the elements of power. The developed frame allows us to understand the dynamic character of power as a force that strives to maintain or ameliorate the position of the paradigm that it serves. Based on this frame, we outline how this extended understanding of power can be used to analyze market power itself, and its relation with sustainability.

By |2018-10-04T11:01:08+00:00September 7th, 2018|Uncategorized|0 Comments

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