Rational Reflections March 2024 | Volume 3

Economic theory has historically been based on the concept of decreasing returns to scale. In the U.S., the “Big Five” companies have bucked that trend, delivering increasing returns to scale. Their ability to meet demand at near-zero marginal cost, plus their advantage in holding vast amounts of proprietary data, may spell the Big Five’s continued dominance in investment markets. This month’s Rational Reflections from our Bell Institutional team takes a deeper dive on this topic.