Explanations

Long Read: Do companies have too much monopoly power?

Geoff Riley

27th July 2018

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A new paper from Princeton economist Jan De Loecker finds that the mark ups (profit margins) of the world's largest global companies has been increasing raising fresh concerns about the impact on consumer welfare especially given the background of endemic corporate tax avoidance.

The research finds that while global average markups were less than 10% in 1980, they were at almost 60% in 2016.

Click below for some links to related features on monopoly power in markets

Big British companies appear to have more market power than they used to, leading to higher prices for worse service. (Think of water industry, housebuilding, etc.) Chart shows that lots more firms are able to charge big mark-ups on what they sell pic.twitter.com/cj2qL3UxJl
— Callum Williams (@econcallum) July 27, 2018

Web creator Tim Berners-Lee has said that the big tech companies have too much power. But what can we do about it, and how much change do we really want? https://t.co/iCXHGd4EXO pic.twitter.com/FI48PUTljY
— New Scientist (@newscientist) March 12, 2018

No One Is Innocent In The Global Game of #Monopoly https://t.co/PUnXZsPxmx pic.twitter.com/a2pIJLGJyt
— CPI (@CompPolicyInt) July 12, 2018

High noon in a heatwave: Britain’s monopolistic water industry is under fire from all sides https://t.co/OyNc5WPY6d via @TheEconomist
— Prof Dieter Helm CBE (@Dieter_Helm) July 27, 2018

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.

@tutor2uGeoff

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Long Read: Do companies have too much monopoly power?

Geoff Riley

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