Existence of Monopoly Power in Dietary Market and the Question of Market Failure: A Measurement Using Fuzzy Matrix Theory

Abstract

In economics, market failure is a situation in which the allocation of goods and services is not efficient. Monopoly power and asymmetric information are amongst the major causes of market failure. We plan to identify if there is a market failure in the dietary market. The present study plans to understand how the dietary market works in the city of Pune. After doing some field survey, we have identified that, even though demand for good food is present, but there is a supply-side problem. The market failure is due to asymmetric information about the supply side. Here we have confined ourselves to revealed preference theory. By revealed preference theory we mean ex-ante preferences of the respondents (students). Here we consider fuzzy preference, not crisp preference. We describe a simple fuzzy matrix model when we have a raw data in hand to identify the factors affecting market failure in the dietary market in Pune; also, measurement of the existence of monopoly power from the behavioural point of view.