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Cable, John; Morris, Claire --- "Market Share Instability and the Competitive Process" [2003] ELECD 86; in Waterson, Michael (ed), "Competition, Monopoly and Corporate Governance" (Edward Elgar Publishing, 2003)

Book Title: Competition, Monopoly and Corporate Governance

Editor(s): Waterson, Michael

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843760894

Section: Chapter 7

Section Title: Market Share Instability and the Competitive Process

Author(s): Cable, John; Morris, Claire

Number of pages: 22

Extract:

7. Market share instability and the
competitive process*
John Cable and Claire Morris**

1. INTRODUCTION

The determinants of market share, and the interconnection between
market share and market power, form major themes in Keith Cowling's
early work, as is evident in his paper with Tony Rayner (Cowling and
Rayner, 1970), the subsequent DTI sponsored analysis of advertising and
economic behaviour (Cowling et al., 1975) and his more or less contem-
poraneous and highly influential piece with Michael Waterson (Cowling
and Waterson, 1976). From an early stage, too, welfare (and distributional)
considerations and policy implications have been at the forefront of his
concerns, notably in his work on the social costs of monopoly with Dennis
Mueller (Cowling and Mueller, 1978), in his re-examination of monopoly
capitalism (Cowling, 1982), as well as in his later work on industrial policy
and corporate governance.
This chapter revisits the terrain of market share behaviour, and related
welfare and policy issues. Specifically, it focuses on how far the mobility or
`instability' of market shares can be pressed as a reliable and informative
indicator of the degree of competitiveness in a market, whether in a posi-
tive or normative sense, and with a particular eye on antitrust policy appli-
cations. First, in the following section, we review the a priori arguments
previously raised in the literature, adding some of our own. We then report
a case study of the diagnostic and analytical power of mobility indices in
the UK national daily newspaper market, relating observed ...