Market structure and profits, market power and Cournot: A comment

The paper by Gisser and Sauer returns to the long-running cardinal issue in the field: whether market power really does raise price and profits, in patterns that can be tested and shown empirically (see Shepherd, 1997). Related to that is: whether any such observed relationship may really be caused not by market power, but instead by economies of scale or other "good-performance" actions of dominant firms. If good performance rather than market power were at work, then the Chicago-School "efficient-structure" view would be relevant, with its attempt to reverse the mainstream assumption that causation runs mainly from structure to performance. By finding a Cournot meaning to the pattern, Gisser and Sauer seem to fit the benign Chicago School thinking.