Why this is mistaken
Concentration can identify a setting where interdependence or power deserves investigation. Its meaning depends on market definition, share metric, period, capacity, fringe supply, imports, entry, buyer power, differentiation, and measurement.
Parallel conduct can arise from agreement, independent response to common conditions, public information, regulation, or rational anticipation. Build a dated evidence chain and test alternatives. Treat economic inference and legal proof as distinct questions.
Where to watch
When this mistake may appear
- A market-share table has few large firms.
- Firms change terms in parallel.
- An accounting segment is used as a market boundary.
Check your work
Your work may contain this mistake if:
- Infers agreement from parallel conduct without communications or alternative explanations.
- Infers durable power from a high share without substitution, entry, or capacity evidence.
- Treats reported segment revenue shares as self-validating market shares.