Pavel A. Levakov Market Power and Bargaining Power: Definition and Digital Platforms Perspective

DOI: 10.38050/2078-3809-2024-16-4-22-47

Abstract

For an effective antitrust regulation it is necessary to clearly distinguish between key concepts involved in it. At the same time, in modern scientific literature the concepts of market power and bargaining power are not defined precisely enough. Within the framework of this article, those concepts, as well as related ones (monopoly/monopsony power, balancing power), are discussed in detail. Based on the analysis of recent scientific works, modern approach to defining those concepts is formulated and the key differences between them are highlighted.

In the context of digital economy, it is also important to consider these concepts on digital platforms, whose business practices are increasingly attracting the attention of antimonopoly authorities. Within the article the specifics of their activities in relation to the concepts of market power and bargaining power are considered. In addition, a game-theoretic model is proposed to illustrate the differences and interplay between those concepts on digital platforms. The model is based on a negotiation process about a reduction of the commission rate between a digital platform and a seller, which plans to enter it.

Keywords: antitrust law, market power, monopoly power, bargaining power, digital platform, negotiations.

JEL: C78, K21, L12.

For citation: Levakov, P.A. (2024) Market Power and Bargaining Power: Definition and Digital Platforms Perspective. Scientific Research of Faculty of Economics. Electronic Journal, vol. 16, no. 4, pp. 22-47. DOI: 10.38050/2078-3809-2024-16-4-22-47.

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