ABSTRACT
This chapter examines the structure-conduct-performance, SCP model, first outlining what the model encompasses and then tracing its theoretical antecedents, namely those of the Cournot and Von Stackelberg oligopoly models. The model is grounded in the belief that concentration emanates from collusion or collective monopoly, with the result that any transactions such as mergers and acquisitions that smack of 'largeness' are likely to be classed by the model as anticompetitive, departing from the outcome of perfect competition. In conventional economic terms one can argue that the number of firms is irrelevant to the study of price behavior, since as the contemporary Bertrand model shows, two firms are enough in order to achieve perfectly competitive pricing. Concentration in a given market is more likely to be the result of rivalry between firms, since the reward to performance, namely greater market share, for any firm is reflected in its market conduct.
