TY - JOUR
T1 - Uncovering the Hidden Transaction Costs of Market Power
T2 - A Property Rights Approach to Strategic Positioning
AU - Foss, Kirsten
AU - Foss, Nicolai J.
AU - Klein, Peter G.
N1 - Published online: 14 November 2017
PY - 2018/4
Y1 - 2018/4
N2 - A central construct in competitive strategy research is market power, the ability to raise price above marginal cost. Positioning research focuses on attempts to build, protect, and exercise market power. However, this approach contains hidden assumptions about transaction costs. Parties made worse off by the exercise of market power can negotiate, bargain, form coalitions, and otherwise contract around the focal firm's attempts to appropriate monopoly profits—depending on transaction costs. We build on property rights economics to explain how transaction costs affect positioning and offer propositions about successful positioning in an environment with transaction costs.
AB - A central construct in competitive strategy research is market power, the ability to raise price above marginal cost. Positioning research focuses on attempts to build, protect, and exercise market power. However, this approach contains hidden assumptions about transaction costs. Parties made worse off by the exercise of market power can negotiate, bargain, form coalitions, and otherwise contract around the focal firm's attempts to appropriate monopoly profits—depending on transaction costs. We build on property rights economics to explain how transaction costs affect positioning and offer propositions about successful positioning in an environment with transaction costs.
UR - https://sfx-45cbs.hosted.exlibrisgroup.com/45cbs?url_ver=Z39.88-2004&url_ctx_fmt=info:ofi/fmt:kev:mtx:ctx&ctx_enc=info:ofi/enc:UTF-8&ctx_ver=Z39.88-2004&rfr_id=info:sid/sfxit.com:azlist&sfx.ignore_date_threshold=1&rft.object_id=954921369609&rft.object_portfolio_id=&svc.holdings=yes&svc.fulltext=yes
U2 - 10.1002/mde.2905
DO - 10.1002/mde.2905
M3 - Journal article
VL - 39
SP - 306
EP - 319
JO - Managerial and Decision Economics
JF - Managerial and Decision Economics
SN - 0143-6570
IS - 3
ER -