Book published
My new book, Market Domination (Praeger), is now on sale. Here's the Amzon link.
Here's the table of contents:
1 The New Oligopoly
2 Oligopolies and Oligopsonies
3 Grow or Die
4 Disruption and Innovation
5 Prices and Costs
6 Oligopolies and Public Policy
7 Convergence, Choice, and Consolidation
8 Market Domination in Three Industries
Conclusion
And here's an excerpt from Chapter 1::
MONOPOLIES
MOST PEOPLE ARE FAMILIAR with the concept of a monopoly, a situation in which one company or person controls a market by being the single source of some product or service. And pretty much everyone agrees that monopolies are bad in many ways: they eliminate competition in terms of price, quality, service, and variety. Some readers may remember the Lily Tomlin quote: ''We don't care. We don't have to. We're the phone company.'' But that joke from the 1970s no longer makes the same sense-at least, it didn't until recently.
In 1984, the monopolistic phone company, AT&T, was split up after an antitrust action by the U.S. government. It was chopped into a half-dozen regional companies along with a national long-distance company that retained the AT&T name. This was one of the high watermarks of American antitrust regulation, as it introduced real competition into an area that looked to be a perpetual monopoly hosted by one of the world's most powerful companies. The phone industry has since swung back from fragmentation to the current wave of concentration, but there is no longer a monopoly.
And that's typical. Except in rare cases, monopolies don't exist in major industrialized countries. Competition in a free market is the watchword of modern capitalism, and those days when governments or kings granted an individual or group exclusive licenses to sell certain products are long gone. And as free trade and globalism reach into every corner of the world, most of the remaining local monopolies in smaller economies are gradually being eliminated.
Look, for example, at Microsoft. As we write, it's just coming out of a long series of antitrust suits both in the United States and Europe. In the end, for various reasons, the antitrust actions have fizzled out-at least in the United States-but the lawsuits have certainly cost Microsoft in terms of industry initiative and legal fees, as well as certain restrictions on how it does business.
The advantages of standard file formats and applications in the computer industry are, it is generally agreed, offset by the repressive power of having a single company control a market, a situation that hurts other companies and society in general by repressing innovation and price competition. Perhaps even worse, the cost of everyone using Microsoft software has been the growth of software viruses attacking the well-known holes in the Microsoft monoculture.
That kind of market domination by one company, one with more than 80 percent or 90 percent market share of a product or service, is rightly seen as a danger. Only a few public utilities, perhaps water or electricity, can justify having a single provider. These are sometimes called ''natural monopolies,'' since the idea of running two parallel electric grids or municipal water systems is clearly wasteful. But even so, such monopolies are local in nature and highly regulated. Moreover, such older monopolies as the local telephone and the national postal service have been forced to face new competition lately, thanks to cell phones, overnight delivery services, and e-mail.
OLIGOPOLY DEFINED
Monopoly, by and large, is no longer a major issue. But the urge to corner the market is still alive. It now takes the form of oligopoly, and oligopoly is becoming the rule in an increasing number of industries. Oligopolies have been around as long as commerce has.
The term, in its narrowest sense, means a market in which there are few sellers of a product or service. Instead of an open market with lots of companies contending for your business, you are faced with a few big companies that, between them, control the entire market. The existence of oligopolies changes the nature of a free market.
While they can't dictate price and product availability as absolutely as a monopoly can, they can make explicit or silent agreements about such matters. Members of an oligopoly might not compete too hard against each other for your business, since it is in all their interests to maintain a stable market and profitable prices. As one standard college economics textbook puts it, ''The oligopolists are torn between the desire to outwit competitors and the knowledge that by cooperating with other oligopolists to reduce output, it will earn a portion of the higher industry profits.'
8:31:18 PM 
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