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Competitive Monopoly Market Research

Posted on:2006-08-09Degree:DoctorType:Dissertation
Country:ChinaCandidate:L YinFull Text:PDF
GTID:1116360155967133Subject:Industrial Economics
Abstract/Summary:PDF Full Text Request
Since 1990s, the tide of economic globalization has been sweeping over the world in a powerful way, which was driven by information technology and popularized by the achievements of high-tech revolution, thus make social and economic environment of all countries experienced the process of changing gradually. As a result, a large amount of new characteristics of economy have emerged, which accelerated to form new economic configurations in developed countries like U.S.A.. So this kind of new economy is based on globalization of information technology, transmitted by the internet, and dominated by information and communication technical industry, therefore economic structures, organizations and operating processes have changed a lot and demonstrated some new economic characteristics which are different from that of traditional economics.Under the condition of network economy, the electronic information technology developing rapidly, and has formed new industry groups, such as information products manufacturing, software development, development of information resources and information service, etc., all of these groups have combined to from a new industry—Information and Communication Technology (ICT) Industry. Nowadays, ICT industry is playing an important role both in developed nations and developing nations, and has became a key department which accounts for promoting a nation's economic growth increasingly, its development level has already been a sign of weighing a national economic development levels. Moreover, its far-reaching influence has also consists in quickening the process of economic integration of the world and promoting the position in international division of developing countries. The prosperity of ICT industry has brought along lots of relevant industries like information service industry, and has been incorporating into traditional industries, thus created new chances and challenges for them, and made changes to people's style of production and life in every aspect.Through some character showed at present in ICT industry, we have seen three kinds of situation that demonstrated in its development:Prosperity and recession coexist. On one hand, If we have some knowledge about the history of computer and network industry, we can find that some unknown little companies like Microsoft and Intel in the past had become monopolistic companies with enormous market share within very short time, and their value soaring correspondently. Some other new network equipment suppliers such as Cisco and Netscape also have made much difference in their fast development. Yahoo and Amazon have been worldwide famous network companies within a few years, and their market scale are expanding constantly as well. On the other hand, some monopolistic computer companies in the past have lost its previous dominant position gradually, examples as IBM and Apple computer manufactures, furthermore, other monopolistic companies in the past even have already become impoverished, such as Wang computer company. In general, lots of cases of amalgamation, reorganization happened among companies, as a result, prosperity and recession coexist in ICT industry, its developing speed and changing frequency in the industry are greatly higher than that of some traditional industries.Amalgamation and separation coexist. There are a large amount of amalgamation and separation cases in ICT industry. Which happened among the communication companies, communication companies and computer companies, as well as network companies and publishing companies. In addition, there are also some upstream and downstream suppliers of a big company integrated. However, not all of these amalgamation were successful cases, there are also some failed businesses. Some cases happened in a country, like the merger between Time Warner and AOL, another cases happened between multinational companies, such as the merger between BT in Britain and MCI in U.S.A. Meanwhile, There are still many separation cases, such as the business of mobile communication has been separated from fixed communication networks. In nowadays, some specific businesses in large companies are separated from each other, these detailed businesses are R&D, producing and marketing, etc., which proves that, on one hand, the comprehensive competence of many companies has being strengthened constantly, and their producing and marketing scale becoming larger than before, while other companies are concentrating on its own core tocompetences and developing with specialization, Standardization and Simplification.Monopolization and competition interacting. The trends of economic globalization and liberalization lead to unprecedented openness and competition, thus come to a state of monopolization with larger scale and higher level. In ICT industry, such inherent natures as network effects, standardization and compatibility, etc. have pushed monopoly and competition to a higher and more powerful degree. As for monopoly in ICT industry, it could be monopolization in producing scale, or in differentiated products, as well as monopolization in technologies or intellectual property rights. The monopolist could be a dominant enterprise with monopolistic power or large scale, or a small and medium-sized enterprise which responsible for certain links through whole industrial chains. Meanwhile, the state of competition is getting fiercer and more diverse in the condition of highly monopolization. Besides traditional competition as in products quality, pricing, marketing, the competitive goalare much higher and strategies are more complicated------to set up product standardsand cover whole market. In a word, monopolization and competition in ICT industry do not stand for two extremes any longer, and act or be in opposition each other as in traditional industries, on the contrary, the more developed the industry is, the more inseparable of monopolization and competition are, they have been inter-weaving, inter-permeating and integrating in a dynamic economic environment.We could find some literatures discussing networking economics, but we find a few articles on monopolization and competition in certain ICT industry. Many domestic researchers treated with the same terms as "information industry", "digital industry", etc., and have not undertaken deeper research into a specific industry or a certain market. But the fact is that the impact of network economy has made market, structure and behaviors in ICT industry much different from traditional industries, moreover, monopoly and competition is one of the eternal themes in studying industrial organization. In this case, it is necessary for us to start with the inner relationships based on information and communication technologies in ICT industry, and to systematically investigate characteristics of monopoly and competition, enterprises' behavior and operating mechanism in ICT industry, with the purpose ofunderstanding the dynamic changes of market structure, behavior and performance in ICT industry, and to find out the differences of monopoly and competition between traditional industries and ICT industries, therefore to contribute to structuring the theoretical system of network economics and ICT industry and put forward some regulatory suggestions.The combination of highly monopolization and competition has lead to a new market structures in ICT industry competitive monopolization. As the matter of competitive monopolization, the author holds a view that two kinds of integration in value chain of ICT industry have caused great dynamic changes, thus pave the way for analyzing trends of monopolization with multi-dimensions. The backgrounds and foundations of monopolization are as follows: complementary nature of ICT products, mechanism of risk-sharing and cost-sharing among companies, cooperative standard setting as well as information and communication technologies globalization. So, all these factors could explain the changing and restructuring of ICT industry, the consequence is that a kind of new market structure being formed ,say, Competitive Monopolization.Because entry and exit barriers in ICT industry are not very high, which increased the numbers of realistic and potential competitor that incumbent had to deal with. As a result, keen competition caused competition mode diversified. Consequently, some multifarious new competitive strategies are adapted by incumbents and entrants. The consequence of competitive monopolization is that monopolistic position of entrants is no longer unalterable, but probably be replaced by entrants with competitive power at any time.The new mode of monopoly and competition in ICT industry are challenging traditional antitrust laws and regulations. If we judge some cases with traditional standards without considering new characteristics of ICT industry, it is possible that our current policies would curb competition and damage consumer's welfare. Therefore, the authorities of antitrust and regulation faced difficult problems, in that the market structure of "winner take most" is the natural equilibrium in network market, and conditions that such intervention seeks to establish already exist in thismarket, if the authorities of antitrust and regulation want to establish a competitive market structure that each enterprise has roughly equal market shares according to their imagination, the result may be undesirable. Therefore, government agencies should pay more attention to the competitive strategies adapted by companies, but not market share and concentration degree in ICT industry itself. In other words, the SCP paradigm established by The Harvard School is not suitable in understanding the monopolization and competition in ICT Industry, some ideas from Chicago school may be convictive instead. Some possible innovations:Firstly, with regards to mainstream views about some natures and features of networks, such as high fixed cost and low margin cost, winner take all, demand-side economies of scale as well as increasing marginal returns, the author considers that there are some problems of inaccurateness or incompleteness in these descriptions. Therefore, based on some researching achievements abroad and at home, the author revises these problems from a scientific and comprehensive perspective.Secondly, the author regards information technology as the endogenous variable in analyzing market structure of ICT Industry, and combined some economic rules of network economy, thus made further understanding of marker structure, conducts and performances. On the basis of studies above, the author put forward a concept of competitive monopolization.Thirdly, tying and predatory pricing that involved abusing market power in accordance with American current antitrust law system are not always lawbreaking in software industry, instead, considering particular features of certain industry and dynamic competing condition, more prudential measures should be taken when judging high-tech industries by citing traditional antitrust laws. In the condition of network economy, a new antitrust law is urgently needed to meet changes on economy and technology. Shortcomings and further researches needed:The article is based on cases and data from developed countries, especially from U.S.A., whose ICT industry is fully developed, so materials of ICT Industry in Chinain this article is lacked. There are two reasons could explain, one is that ICT Industry in our country started late, though developed rapidly, statistical standards in each region are different, therefore it is difficult to compute and compare the materials and data among different regions. The other is that some economic features and technological features embodied by ICT Industry in China are the same as that in early stage of developed countries, and correlative political systems are incomplete and imperfect in China, for example, China still has no antitrust law.The author attempts to take technological innovation and progress of ICT Industry as the key through whole article, and as the main reason in demonstrating marker structures of competitive monopolization, but only did a not very good job in this, with the result is that the structure of article shows a little incompact, some materials lack necessary relations, thus made it difficult to express fundamental ideas distinctly and accurately.The problem of monopoly and competition is always a complicated and empirical subject, in which much knowledge and researches are necessary, therefore, understanding and having good command of this problem is a highly difficult task. Especially in the condition of network economy, theories literatures and empirical materials are not easily available, it is very hard to put forward a different idea form traditional market structure. In addition, ICT Industry is developing vigorously and rapidly, there are still some industrial features have not demonstrated, therefore our study is limited to phenomena that could be observed. Although the author tried her best and made great effort, shortcomings and defects are still unavoidable, opinions and criticisms from any experts would be the author's appreciation.
Keywords/Search Tags:ICT industry, competitive monopolization, industrial convergence
PDF Full Text Request
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