Monoplistic efficiency: A performance analysis on the market structure of the e-commerce industry

This paper aims to answer a question in terms of the e-commerce industry: is it efficient to have a high market concentration, even monopoly? First literature review is conducted to find appropriate theories and research directions in the field of industrial organization to analyze the e-commerce industry. Second, analytical models are built up to investigate the reasons, formation and rationality of monopolistic efficiency in the e-commerce industry, both theoretically and quantitatively. Third, data from Chinese e-commerce industry are imported, processed and regressed as an empirical evidence to the theoretical prediction. Last, the conclusion is established that it is natural and efficient to be highly market concentrated in the e-commerce industry.