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An approach to reinvigorating economic competition that doesn't break up corporate giants, but compels them to share their technology, data, and knowledge \"Bessen is a master of unpacking the nuances of a complex array of interrelated trends to build a coherent story of how the promise of the democratized Internet ended up under the control of just a few. Read The New Goliaths to see how the forest came to have only room for a few tall trees with the rest of us in the undergrowth.\"-Joshua Gans, coauthor of Prediction Machines: The Simple Economics of Artificial Intelligence Historically, competition has powered progress under capitalism. Companies with productive new products rise to the top, but sooner or later, competitors come along with better innovations and disrupt the threat of monopoly. Dominant firms like Walmart, Amazon, and Google argue that this process of \"creative destruction\" prevents them from becoming too powerful or entrenched. But the threat of competition has sharply decreased over the past twenty years, and today's corporate giants have come to power by using proprietary information technologies to create a tilted playing field. This development has increased economic inequality and social division, slowed innovation, and allowed dominant firms to evade government regulation. In the face of increasing calls to break up the largest companies, James Bessen argues that a better way to restore competitive balance and dynamism is to encourage or compel these companies to share technology, data, and knowledge.

Large firms played a central role in the \"new trade\" models that became a major focus of trade economists in the early 1980s. Subsequent literature for the most part kept imperfect competition but jettisoned oligopoly. Instead, as the heterogeneous firms literature burgeoned in the 2000s, monopolistic competition quickly became established as the workhorse model. The use of oligopoly in trade models has been criticized for reasons that we argue are unpersuasive. Renewed incorporation of oligopolistic firms in international trade is warranted. Quantitative investigations of welfare effects of trade policy should again address the impact of such policies on the allocation of profits across countries. Les grandes firmes ont joué un rôle central dans les modèles du « nouveau commerce international » qui sont devenus le centre d'attention des économistes spécialisés dans ce domaine au début des années 90. La littérature spécialisée subséquente a en gros gardé la concurrence imparfaite dans ses modèles mais a jeté par-dessus bord l'oligopole. Dans la littérature sur les modèles de firmes hétérogènes qui a fleuri dans les années 2000, la concurrence monopolistique s'est vite établie comme cheval de bataille dans ces modèles. Les auteurs suggèrent que l'utilisation de l'oligopole dans les modèles de commerce international a été critiquée pour des raisons qui ne leur semblent pas persuasives. Il leur semble que la réincorporation des firmes oligopolistiques dans les modèles de commerce international est justifiée. Des enquêtes quantitatives sur les effets de bien-être de la politique commerciale devraient de nouveau s'attaquer au problème de déterminer l'impact de ces politiques sur l'allocation des profits entre pays.

Food processing firms vary in size, exhibit productivity differences, produce highly differentiated products, and engage in monopolistic competition. As the Transatlantic Trade and Investment Partnership negotiation is gaining momentum and trade in processed food is becoming more important, it is worth analyzing the impact of this potential trade liberalization on the U.S. and E.U. processed food markets. This study develops a three-region (United States, European Union, and Rest of the World) monopolistic competition trade model with heterogeneous firms to analyze the effects of U.S.-E.U. bilateral tariff elimination and nontariff barrier harmonization on prices, domestic production, bilateral trade, productivity, measure of operating firms, and welfare in the processed food sector. The results show that this trade liberalization expands cross-hauling, with U.S. exports to the European Union increasing by about 95% and E.U. exports to the United States rising by about 87%. This increase in cross-hauling displaces exports from the Rest of the World to the United States and the European Union by approximately 3% and 8%, respectively. U.S. and E.U. total processed food production increases by about 4% and 0.4%, respectively. Because of lower prices and more consumption, net welfare expands in all three regions.

We study market liberalisation under imperfect competition in the presence of price effects. For this purpose, we build a three-country model of international trade under monopolistic competition. The neighbouring effect translates how the size effect propagates across countries. When a country increases in size, its relative wage increases, as well as that in a small and nearby country, whereas that in a large and distant country falls. We also show that a preferential trade agreement increases the relative wage, the welfare and the terms of trade in the partner countries, where the integration effect dominates, while lowering those in the third country.

We develop a monopolistic-competition model of trade with many industries to examine how home-market effects vary with industry characteristics. Industries with high transport costs and more differentiated products tend to be more concentrated in large countries than industries with low transport costs and less differentiated products. We test this prediction using a difference-in-difference gravity specification that controls for import tariffs, importing-country remoteness, home bias in demand, and the tendency for large countries to export more of all goods. We find strong evidence of home-market effects whose intensity varies across industries in a manner consistent with theory.

Under constant elasticity of substitution (CES) preferences and Cournot (or Bertrand) competition, a larger market induces exits of domestic firms, lower prices, and larger production of surviving firms because of competition from more foreign firms, even without resorting to the selection effects of Melitz. The elasticity of the number of firms to population decreases with substitutability between goods, and it reaches 0.5 under Cournot competition with homogeneous goods: empirical evidence supports this structural relation against the unitary elasticity of monopolistic competition. The results hold also in a 2 × 2 × 2 Heckscher-Ohlin model with imperfect competition generating inter- and intra-industry trade due to comparative advantage or comparative preferences.

We study the procompetitive gains from international trade in a quantitative model with endogenously variable markups. We find that trade can significantly reduce markup distortions if two conditions are satisfied: (i) there is extensive misallocation, and (ii) opening to trade exposes hitherto dominant producers to greater competitive pressure. We measure the extent to which these two conditions are satisfied in Taiwanese producer-level data. Versions of our model consistent with the Taiwanese data predict that opening up to trade strongly increases competition and reduces markup distortions by up to one-half thus significantly reducing productivity losses due to misallocation.

This book addresses the question of how competition takes place in international manufacturing industries. It examines patterns of rivalry among firms from different countries across national boundaries and their influences on international trade and investment. By using various data on Japanese firms in manufacturing industries from the late 1950s through the early 2000s, the first part of this book presents a series of empirical analyses that examines effects of market structure on export pricing, linkages of domestic and foreign market structures on trade performance, and patterns of oligopolistic interactions among firms from different countries in exporting. The second part of this book deals with the impact of strategic interactions on foreign direct investment. In particular, the book examines 'bunching' in foreign direct investment, strategic interactions in intra-industry cross-market foreign direct investment, and their effects on entry patterns and post-entry performance.

This article looks at two features of globalization, namely, productivity improvements and falling trade costs, and explores their effect on welfare in a monopolistic competition model with heterogenous firms and technological asymmetries. Contrary to received wisdom, and for reasons different from adverse terms of trade effects, it is shown that improvements in a partner's productivity must hurt us. Moreover, falling trade costs can raise welfare in the technologically advanced country while reducing it in the backward one, if technological asymmetries are large enough.

Ronald Burt describes the social structural theory of competition that has developed through the last two decades. The contrast between perfect competition and monopoly is replaced with a network model of competition. The basic element in this account is the structural hole: a gap between two individuals with complementary resources or information.