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  3. American Economic Review
  4. March 2007
  5. Market Share Dynamics and the "Persistence of Leadership" Debate

Market Share Dynamics and the "Persistence of Leadership" Debate

  • John Sutton
American Economic Review
vol. 97, no. 1, March 2007
(pp. 222-241)
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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.97.1.222

Additional Materials

JEL Classification

  • D43 Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection
  • L13 Oligopoly and Other Imperfect Markets