The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Countervailing Power

  • Christopher M. Snyder
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_519

Abstract

‘Countervailing power’ is a term coined by J.K. Galbraith (1952) to describe the ability of large buyers in concentrated downstream markets to extract price concessions from suppliers. Galbraith saw countervailing power as an important force offsetting suppliers’ increased market power arising from the general trend of increased concentration in US industries. He provided examples such as a nationwide grocery chain extracting wholesale price discounts from food producers, and large auto manufacturers extracting price discounts from steel producers.

Keywords

Antitrust Countervailing power Mergers Monopoly Oligopoly Pharmaceutical industry Returns to scale 

JEL Classifications

L13 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Christopher M. Snyder
    • 1
  1. 1.