Explains the working of “advantageous industries,” a new concept the authors define to explain why some industries are more valuable than others.

The chapter concerns the various aspects of a capitalist market economy. The stages of development of capitalism are recalled: primitive accumulation, merchant capitalism, manufacturing capitalism. Managerial capitalism (Berle and Means, Marris) assigns a central role to managers in the (hierarchic) power structure of the firm. Oligopoly (analysed through Sylos Labinis notion of the barriers to entry) and not competition is the dominant market form in this stage. Interlocking shareholdings and interlocking directorship then connect banks and companies in widespread power structures. The financialization of the economy leads then to the dominance of money managers, with a shorter time horizon and different priorities.

This chapter narrates the beginning of an international dispute. In Paris, we meet Filibert N’Diaye, a senior associate at Burnham & Hutz LLP, and his boss, law firm partner Lionel Blum, as they receive the mandate to represent a state before the ICJ. The newly-formed legal team is trying to develop a persuasive litigation strategy and to manage its delicate relationship with the client. Meanwhile, the chapter reflects on the profound transformations of the global legal services market in the last few decades. Yesteryear’s international litigators were an élite club of white Western men, who came to international law late in their careers and handled only a few disputes at a time. In recent years, many multinational law firms have established dedicated practice areas in the world’s dispute settlement capitals. The creation of a specialized ‘bar’ around each international court fostered the mutual acquaintance between counsel and the bench, thereby deeply affecting the substance, tone, and ethos of international litigation.

In the midst of the COVID-19 pandemic, David Beasley, the Head of the World Food Programme, in his address to the Security Council of the United Nations (henceforth, the ‘UN’) stated that the world had to “act fast” to avoid “multiple famines of biblical proportions within a short few months”. While the UN feared that severe global food shortages would strike many parts of the world, prices for corn, wheat and soybeans have not increased in response to the spike in demand caused by the onset of the pandemic. Instead, the most active corn futures on the Chicago Board of Trade (henceforth, the ‘CBOT’), which is the world’s most important commodity exchange, have fallen by 16% since the start of 2020, while wheat has fallen by nearly 6% and soybeans by nearly 5%. Farmers are the ones who are losing profits. For instance, in the US, 8% more farmers filed for bankruptcy in 2020, than in the first half of 2019, and this number has been steadily increasing for the past 5 years. Across Africa, millions of farmers are facing economic devastation as the crop prices offered to them continue to fall and, in some cases, amount to less than the farmers’ production costs. In Eurasia, particularly in Russia and Ukraine, farmers have been seriously impacted by the pandemic as well. This issue of farmers being subject to profit losses has been witnessed across the world, but there is no systemic change to their desperate economic situations on the horizon.

This topic examines the nature of market structure, its characteristics and implications for managerial strategy and industrial structure, conduct and performance. The starting point is a discussion of markets and the characteristics that are relevant in terms of determining structure and strategy, in particular pricing. These characteristics relate to number of sellers, type of product, barriers to entry, pricing power and the importance of non-price competition. The four main types of structure, perfect competition, monopoly, monopolistic competition and oligopoly, are described in terms of these characteristics, and in each case both a graphical and algebraic analysis of the equilibrium is presented for both short-run and long-run situations. The different types of structure are compared in terms of price, output, profit, efficiency and welfare. The relationships between structure, conduct and performance are discussed in the light of recent empirical studies, along with some implications for government policy which are examined further in Chapter 14. Case studies illustrate the application of theoretical concepts in practice, particularly in the presence of Covid-19.

Regulated industries increasingly look like multi-product monopolies or oligopolies, which necessitates adaptations in the design of regulation. An oligopolistic market structure will be preferred if it allows information rents to be cut and shared and if these gains offset lost scale economies. Rent cuts come from sampling effects, yardstick competition and complementarity effects. In mixed oligopolies, differences in the objectives and constraints of public and private competitors make the regulation tasks more complex and limit the possibility of implementing yardstick competition. If the costs are relatively well known (standardized technologies), a monopoly may be a better choice as there is no variance in production costs and so dual sourcing is inefficient. Otherwise, when the firms’ costs are correlated, a duopoly leads to lower marginal costs despite the need to duplicate the R&D costs. In mixed oligopolies, regulation must be adapted to the differences in the objectives and institutional constraints of private and public operators. In oligopolistic industries, self-regulation and regulation by contract offer alternatives to regulation by a specialized regulatory agency. For a multi-product monopolist, the regulatory challenge is to decide whether to set a rate of return for each product sold by the regulated firm or for its overall business.

Market structure is the type of overall market we see in different situations. A theoretical starting point in economics is the idea of the perfectly competitive market in which the market itself sets the price, there are uniform goods, and there is mobility of resources. In many markets, there are concentrations of power and there is complexity. We study in depth the price-fixing scandal that unfolded between Christie’s and Sotheby’s auction houses in the 1990s, owing to the duopolistic market structure between the two firms. Substantial litigation ensued with fines and penalties around $512 million. We consider US tests for market concentration and monopolistic power.

This chapter provides the economic framework and context in which entertainment and media businesses operate. Covers hours of work, growth rates, population effects, productivity, price effects, industry structures, valuation variables, and basic economic concepts.

We briefly discuss the rationale and the premises for the theoretical model of the book and how does our theoretical model relate to the existing and related literature. The model describes an economy with an oligopolistic industrial sector and our purpose is to analyze the interactions between the market structure and the macroeconomy – in particular, how does the equilibrium among the oligopolistic firms impact the macroeconomy and how does the macroeconomy impact back on the equilibrium among the oligopolistic firms? We set the premises of the whole work, exploring the theoretical pillars of the relationships between the industrial structure and the macroeconomy.