Measuring the power to monopolize. A simple-game-theoretic approach

Abstract

This paper proposes a measure of the power to monopolize based on the ability of firms to induce a shift from a competitive to a non-competitive regime, through coalition formation. First, in the framework of monotonic simple games, we show how to use the Shapley value in terms of a power index for individual firms within an industry. Second, we construct an aggregate power index for industries. It is based on axioms allowing to make explicit the respective roles of the number and size of the minimal winning coalitions and aggregates additively non-normalized individual power indices. © 1985.