Towards an Integration of Static and Dynamic Measures of Industry Concentration

Abstract

O VER the past few decades measures of market, or industry, concentration have acquired respectable, if not completely untarnished, status as useful indicators of monopoly power. The publication in recent years of papers emphasizing the importance to the monopoly problem of changes in market shares of individual firms, however, can in many respects be viewed as challenges to the status of the static measures.' More important, these dynamic measures of market structure hold out the hope that, when analytically incorporated with static measures, they may prove to be of great help in identifying and understanding monopoly power. This paper presents a large body of data on both static and dynamic measures that could provide a basis for increasing this understanding. But first a brief analysis suggests how these two types of measures may be useful when inferring the presence of monopoly power in a particular industry.