Monopolistic Competition? The Rise of Brand-Chain Competition and Unresolved Social Questions

  • Glenna Sumner University of Tennessee at Martin
Keywords: Imperfect markets, Monopolistic Competition, Brand-Chain Competition, Market Consolidation, Oligopoly, Mergers, Monopoly Power, Global Corporation, Lack of Competition


Imperfect competition in microeconomics has been known as “Monopolistic Competition” since the near simultaneous release of books by Joan Robinson and Edward H. Chamberlain in 1933.  The topic is still taught in economics texts and classrooms to this day, despite little evidence that it now exists in the industrialized world.   Oligopolies have moved into this highly competitive field via Brand-Chain Competition.  In Brand-Chain Competition, the Oligopoly uses its deep pockets to fund research and development of new products which are sold through brand-names.   While the high barriers to entry remain, and the Oligopoly faces little competition from additional firm entry into the industry, entry into a particular product market is rather simple, and highly competitive.  Robinson and Chamberlain were correct that economic profits only occur in the short-run due to this high competition.  They were incorrect on who the end-game players would be.  Rather than massive numbers of sellers, there are massive numbers of brands and few parent corporations.   These firms send out a new products via brands, with the intent to earn excess profits only until the competition can produce and market a similar product, which reduces demand for the original firm’s product in the long-run.   The brand then responds by releasing a new or improved product from its chain of products, and the short-run begins again.  These changes are so new, the social impacts are still a question.

Author Biography

Glenna Sumner, University of Tennessee at Martin

Associate Professor of Economics



Baran, P. A. a. S. P. M., 1966. Monopoly Capital. New York: Monthly Review Press.

Barber, B. a. J. L., 1996. Detecting abnormal operating performance: The empirical power and specification of test statistics. Journal of Financial Economics, Volume 41, pp. 359-399.

BBC News, 2017. BBC News. [Online]

Available at:

[Accessed 9 January 2018].

Bhandari, R., 2013. Rise of the Global Corporatocracy; An Interview with John Perkins. Monthly Review, pp. 34-42.

Braverman, H., 1974. Labor and Monopoly Capital. New York: Monthly Review Press.

Chamberlain, E. H., 1933. Theory of Monopolistic Competition. Cambridge: Harvard University Press.

Foster, J. B., McChesney, R. W. & Jonna, R. J., 2011. Monopoly and Competition in Twenty-First Century Capitalism. Monthly Review, April, 62(11), pp. 1-39.

Friedman, M., 1962. Capitalism and Freedom. Chicago: University of Chicago Press.

Grullon, G. a. L. Y. a. M. R., 2017. Are US Industries Becoming More Concentrated. [Online]

Available at: or;10.2139/ssrn.2612047

[Accessed May 2017].

Kalecki, M., 1954. Theory of Economic Dynamics. London: Unwin University Books.

Lerner, A., 1934. The Concept of Monopoly and the Measurement of Monopoly Power. Review of Economic Studies, 1(3), pp. 157-175.

Marx, K., 2010. Das Kapital. Seattle: Madison Park.

Piketty, T., 2014. CAPITAL in the Twenty-First Century. Cambridge : Belknap Press.

Reisman, D. A., 2004. Schumpeter's Market: Enterprise and Evolution. Cheltenham: Edward Elgar Publishing.

Reynolds, P. J., 1983. Kalecki's Degree of Monopoly. Journal of Post-Keynesian Economics, Spring, 5(3), pp. 493-503.

Robinson, J., 1933. Economics of Imperfect Competition. London: MacMillan and Co..

Schumpeter, J. A., 1942. Capitalism, Socialism and Democracy. New York: Harper and Brothers.

Schutz, E. A., 2001. Markets and Power. Armonk, New York: M.E. Sharpe.

Sumner, G. & Huo, Y. P., 2014. Rule of Law and Credibility: Lessons for the Forgetful. Journal of Power, Politics & Governance.

Vieira, O. V., 2008. A human right to be free from poverty: its role in politics. Oxford: Oxford University Press.

How to Cite
Sumner, G. (2018). Monopolistic Competition? The Rise of Brand-Chain Competition and Unresolved Social Questions. Advances in Social Sciences Research Journal, 5(1).