Market power and cost pass-through measure: A competition policy perspective

Market power and cost pass-through measure: A competition policy perspective Dr Ivi Theodoulou analyses market power and cost pass-through measures in this informative policy perspective. Economists use frameworks like Structure-Conduct-Performance (SCP) and New Empirical Industrial Organization (NEIO) to measure market power in their attempt to eliminate potential market power hindrance to achieve traditional economic objectives such as efficiency, innovation, and consumer welfare. The SCP framework links market structure (number of firms, concentration, barriers to entry) to firm conduct (pricing strategies, output decisions) and ultimately to market performance.