Market Power and Market Change in the U.S. Automobile Industry

two of their number. The companies' difficulties are generally attributed to oil price increases, economic recessions, increasing government regulation, and changing cost conditions relative to foreign producers. Less often recognized, however, is the crucial underlying role of monopoly power in the industry, and in particular the long-standing dominance of General Motors. The concentration of the automobile market, this paper will argue, has led to distortions of decision making, which rendered the companies vulnerable to outside forces and ultimately induced responses that proved damaging to the entire U.S. industry.