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What’s best for S’pore consumers – competition or market dominance?
A small market may be dominated by a few big players, but smart regulation can keep their power in check and actually help consumers.
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While market competition is often perceived as the perfect model for low prices and high-quality goods, it is not always the case, especially for Singapore, says the writer.
ST PHOTO: LIM YAOHUI
Sumit Agarwal
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Market competition is often perceived as the perfect model for ensuring low prices and high-quality goods and services for consumers. Conventional wisdom says that when there are multiple firms competing in the market, it will help drive up innovation, improve efficiency and offer higher value to consumers at competitive prices. But this is not always the case, let alone ideal, in all industry sectors, and particularly not in a small market like Singapore.
Here, an oligopolistic market structure – involving a handful of dominant industry players – may have its merits. It can help the country stay nimble and drive change quickly, as it only requires getting these few players to shift the entire market and influence consumer behaviour.
