IDEAS home Printed from https://ideas.repec.org/a/anr/refeco/v17y2025p431-453.html

Market Power in Finance

Author

Listed:
  • Alexandre Corhay

    (Rotman School of Management, University of Toronto, Toronto, Ontario, Canada)

  • Howard Kung

    (London Business School, London, United Kingdom
    Centre for Economic Policy Research, London, United Kingdom)

  • Lukas Schmid

    (Centre for Economic Policy Research, London, United Kingdom
    Marshall School of Business, University of Southern California, Los Angeles, California, USA)

Abstract

Growing evidence points to declining competition across industries in the United States, including the financial sector. Such findings have reinvigorated research efforts to understand the ramifications of rising market power for financial markets. In this article, we survey some of these efforts by reviewing the evidence and outlining a simple model structure that we find useful in organizing and examining links between trends in the competitive environment and financial markets. The framework is highly tractable and endogenously links market concentration, markups, and demand elasticities. Indeed, we think that the structure could serve as a building block in models that can help rationalize and connect some of the empirical evidence we review, as well as flesh out further implications in future research.

Suggested Citation

  • Alexandre Corhay & Howard Kung & Lukas Schmid, 2025. "Market Power in Finance," Annual Review of Financial Economics, Annual Reviews, vol. 17(1), pages 431-453, November.
    • Handle: RePEc:anr:refeco:v:17:y:2025:p:431-453
    DOI: 10.1146/annurev-financial-112823-015621
    as

    Download full text from publisher

    File URL: https://doi.org/10.1146/annurev-financial-112823-015621
    Download Restriction: Full text downloads are only available to subscribers. Visit the abstract page for more information.
    File URL: https://libkey.io/10.1146/annurev-financial-112823-015621?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anr:refeco:v:17:y:2025:p:431-453. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: http://www.annualreviews.org (email available below). General contact details of provider: http://www.annualreviews.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.