Inferential Monopoly (IM)

Inferential Monopoly Theory

This working paper introduces inferential monopoly theory as a distinct analytical category for market concentration in AI-mediated markets. Classical monopoly theory examines market power through control over production, distribution, pricing, or market share. This paper argues that AI-mediated markets introduce a prior layer of concentration: control over computational consideration infrastructure. Inferential monopoly describes concentration over the systems that determine which economic entities become admissible to consideration before human choice, price formation, or competitive interaction occurs. The paper defines inferential power, computational consideration sets, computational admissibility, and inferential infrastructure; distinguishes inferential monopoly from platform, data, search, and industrial monopoly; analyzes failure modes including representation exclusion, inferential lock-in, allocative opacity, and protocol capture; and examines theoretical implications for competition policy.