An institutionalist explanation of joint dominance

This article tries to formulate an institutionalist reassessment of the notion of joint dominance, a market situation in which certain fi rms indirectly synchronize the conduct in a ‘conscious parallelism’. In this article, the concept of joint dominance is treated as an economic common good with the resulting problems of coordination and free riding. We prove, then, that the essence of these problems explains the emergence of economic links between agents involved in a joint dominance. In particular, we defi ne the limit of a joint dominance by the notion of conjectural variations. Moreover, we distinguish different forms of joint dominance as deriving from the old-institutionalist J.R. Commons’ idea of transaction. We demonstrate that joint dominances composed by vertically related parties and/or by fi rms and the ‘public authority’ produce the reduction of a contestable Commonsian transaction as well as the horizontal joint dominance.