Here – in filling out this analytic framework – is where the perspectives, questions, and conclusions of IO literature may usefully be applied. Many financial markets are far from perfectly competitive. Instead, they are characterized by large firms with significant market shares and sustained positive economic profits, a fact not always reflected in financial analysis and regulation.
Yet IO economists, who have studied a variety of topics arising from concentrated market structures, have themselves generally focused on areas other than financial markets, with the important but limited exception of competition issues in commercial banking.