Excessive market power and markups lead to economic problems

It’s not easy, but Australia has an opportunity to boost productivity — the key to increasing living standards, Andrew Leigh writes. Photo: AAP

It’s hard to ignore the growing body of evidence that excessive market concentration can lead to economic problems.

Dominant firms in a market may have less incentive to carry out research and development. They may have less incentive to produce new products. And in some cases, they may have less incentive to pay their employees fairly.