oligopolmakt

Oligopolmakt is a term used to describe the level of market power held by a small number of firms within an industry, where each firm's strategic choices influence the others. In an oligopolistic market, firms are interdependent: price, output, and innovation decisions by one firm affect its rivals, and responses by competitors shape the final outcome. This interdependence often leads to outcomes that differ from those predicted by perfect competition or monopoly.

Key features of oligopolmakt include a small number of dominant firms, significant barriers to entry, and some degree of product differentiation. Barriers can arise from economies of scale, control of essential inputs, strong brand power, or network effects. Because firms watch and react to one another, non-price strategies such as advertising, product development, and capacity planning can be as important as price competition. Tacit collusion or explicit coordination to raise prices or maintain barriers, while illegal in many jurisdictions, is a well-known theoretical concern in oligopolies.

Measurement of oligopolmakt often relies on market concentration indicators such as the four-firm concentration ratio (CR4) or the Herfindahl-Hirschman Index (HHI), complemented by price-cost measures like the Lerner index. The welfare effects are mixed: economies of scale and innovation incentives can improve efficiency, but reduced competition may lead to higher prices, restricted output, or slower innovation.

Policy responses typically involve antitrust enforcement, merger review, and, in some sectors, regulatory oversight. Oligopolmakt is particularly salient in industries with high fixed costs, platform ecosystems, or essential infrastructure, and it remains a central topic in competition and industrial policy discussions.