The structure–conduct–performance (SCP) paradigm, first published by economists

Edward Chamberlin Edward Hastings Chamberlin (May 18, 1899 – July 16, 1967) was an American economist. He was born in La Conner, Washington, and died in Cambridge, Massachusetts. Chamberlin studied first at the University of Iowa (where he was influenced by ...

and

Joan Robinson Joan Violet Robinson ( Maurice; 31 October 1903 – 5 August 1983) was a British economist known for her wide-ranging contributions to economic theory. One of the most prominent economists of the century, Robinson incarnated the "Cambridge Sc ...

in 1933 and subsequently developed by Joe S. Bain, is a model in industrial organization economics that offers a causal theoretical explanation for firm performance through economic conduct on incomplete markets. This model has had direct influence on subsequent

industrial economics In economics, industrial organization is a field that builds on the theory of the firm by examining the structure of (and, therefore, the boundaries between) firms and markets. Industrial organization adds real-world complications to the perfe ...

models such as

Porter's five forces analysis Porter's Five Forces Framework is a method of analysing the competitive environment of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractive ...

. According to the structure–conduct–performance paradigm, the market environment has a direct, short-term impact on the

market structure Market structure, in economics, depicts how firms are differentiated and categorised based on the types of goods they sell (homogeneous/heterogeneous) and how their operations are affected by external factors and elements. Market structure makes i ...

. The market structure then has a direct influence on the firm's economic conduct, which in turn affects its market performance. Therein, feedback effects occur such that market performance may impact conduct and structure, or conduct may affect the market structure. Additionally, external factors such as legal or political interventions affect the market framework and, by extension, the structure, conduct and performance of the market. The structure–conduct–performance paradigm was subject to severe criticism from the

Chicago School of Economics The Chicago school of economics is a Neoclassical economics, neoclassical Schools of economic thought, school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and populari ...

and by the 1980s was largely displaced by applications of

game theory Game theory is the study of mathematical models of strategic interactions. It has applications in many fields of social science, and is used extensively in economics, logic, systems science and computer science. Initially, game theory addressed ...

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References

External links

Structure–conduct–performance paradigm
at Policonomics {{DEFAULTSORT:Structure-conduct-performance paradigm Industrial organization