American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Market Share Dynamics and the "Persistence of Leadership" Debate
American Economic Review
(pp. 222–241)
Abstract
A new 45-industry, 23-year, dataset for Japan is used to investigate the duration of industry leadership. A new scaling relationship linking a firm's current market share with the standard deviation of market share changes is reported. This relationship discriminates in a powerful way between rival candidate theoretical models of market share dynamics. It also makes possible a useful simplification in testing a benchmark model of a Markovian kind. Relative to that model, it is found that at least some industries display a "Chandlerian" bias toward longer durations of leadership than would be present in the benchmark model. (JEL D43, L13)Citation
Sutton, John. 2007. "Market Share Dynamics and the "Persistence of Leadership" Debate." American Economic Review 97 (1): 222–241. DOI: 10.1257/aer.97.1.222Additional Materials
JEL Classification
- D43 Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection
- L13 Oligopoly and Other Imperfect Markets