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MARKET POWER IS POWER
New working paper with @bartonelee2.bsky.social
Thread below! 1/5
gratton.org/papers/Marke...
MARKET POWER IS POWER
New working paper with @bartonelee2.bsky.social
Thread below! 1/5
gratton.org/papers/Marke...
2/5 We study a channel linking market power to political power that does not rely on lobbying, campaign, finance, or persuasion. Instead, firms can distort technological progress to reshape voters’ political incentives.
3/5 Key result: firms can sway majority votes iff they have market power: pass-through, market share, and markups . Under constant-elasticity demand it all reduces to two market statistics: Lerner index and its market share.
5/5 Solutions? Institutions that allow for political commitment: supermajoritarian rules, independent oversight, and better ways to govern industry standards.
4/5 This means that reforms aimed at curbing campaign finance and lobbying may be missing the key margin of influence. Market power does not simply buy power; it is power!
In equilibrium, as this paper shows, de facto power tracks standard measures of market power, survives bans, taxes, and technocratic delegation, and can skew innovation toward regulation-resistant technologies.
By @grattonecon.bsky.social & @bartonelee2.bsky.social at @ethz.ch
buff.ly/fkYG29M
Lehan Zhang (@ethz.ch) presents joint work with @grattonecon.bsky.social (UNSW) and Hasin Yousaf (UNSW) and @paulinegrosjean.bsky.social (UNSW & CEPR): "Adding fuel to the (gun)fire: how politicians polarize the public debate" 🔥 #WISE2026