There is no agreed-upon definition of power in economics

Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

. At least five definitions of power have been used:

• Purchasing power
  Purchasing power
  Purchasing power is the number of goods/services that can be purchased with a unit of currency. For example, if you had taken one dollar to a store in the 1950s, you would have been able to buy a greater number of items than you would today, indicating that you would have had a greater purchasing...
  
  , i.e., the ability of any amount of money
  Money
  Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
  
   to buy goods and services. Those with more asset
  Asset
  In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset...
  
  s, or, more correctly, net worth
  Net worth
  In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...
  
  , have more power of this sort. The greater the liquidity of one's assets, the greater one's purchasing power is.

• Monopoly power, i.e., the ability to set prices or wages. This is the opposite of the situation in a perfectly competitive market
  Perfect competition
  In economic theory, perfect competition describes markets such that no participants are large enough to have the market power to set the price of a homogeneous product. Because the conditions for perfect competition are strict, there are few if any perfectly competitive markets...
  
  , in which supply and demand
  Supply and demand
  Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...
  
   set prices.

• Bargaining power
  Bargaining power
  Bargaining power is a concept related to the relative abilities of parties in a situation to exert influence over each other. If both parties are on an equal footing in a debate, then they will have equal bargaining power, such as in a perfectly competitive market, or between an evenly matched...
  
  , i.e., the ability of players in a bargaining game to influence the outcome, which is the players sharing rule for something (a prize, a cake, access to resources). See e.g. Muthoo, Abhinay 1999: Bargaining theory with applications, Cambridge University Press. To be able to bargain prices ( toggle prices, or rewards etc... ). Also see definition of bargaining
  Bargaining
  Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement. Bargaining is an alternative pricing strategy to fixed prices...
  
  .

• Managerial power
  Management
  Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
  
  , i.e., the ability of managers to threaten their employees with firing or other penalties for not following orders or for not giving in satisfying reports. This exists if there is a cost of job loss, especially due to the existence of unemployment
  Unemployment
  Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
  
   and workers' lack of sufficient assets to survive without working for pay.

• Class power in Marxian political economy
  Political economy
  Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...
  
  : under capitalism
  Capitalism
  Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
  
   this refers to a situation where a minority (the capitalists) in society controls the means of production
  Means of production
  Means of production refers to physical, non-human inputs used in production—the factories, machines, and tools used to produce wealth — along with both infrastructural capital and natural capital. This includes the classical factors of production minus financial capital and minus human capital...
  
   and thus is able to exploit
  Exploitation
  This article discusses the term exploitation in the meaning of using something in an unjust or cruel manner.- As unjust benefit :In political economy, economics, and sociology, exploitation involves a persistent social relationship in which certain persons are being mistreated or unfairly used for...
  
   the majority (the workers).

• Short-side power: on market
  Market
  A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
  
  s that do not clear, those on the short side of the market have short-side power. They can deny to trade with any specific counterparty or attach conditions without suffering a significant loss themselves. Examples are banks in the market for credit or employers in some labor markets.

In general, those with more power also have more freedom

Freedom (political)

Political freedom is a central philosophy in Western history and political thought, and one of the most important features of democratic societies...

 than others and may be able to exploit

Exploitation

This article discusses the term exploitation in the meaning of using something in an unjust or cruel manner.- As unjust benefit :In political economy, economics, and sociology, exploitation involves a persistent social relationship in which certain persons are being mistreated or unfairly used for...

 others in society and/or cause some sort of market failure

Market failure

Market failure is a concept within economic theory wherein the allocation of goods and services by a free market is not efficient. That is, there exists another conceivable outcome where a market participant may be made better-off without making someone else worse-off...

.

It is worth noting that information

Information

Information in its most restricted technical sense is a message or collection of messages that consists of an ordered sequence of symbols, or it is the meaning that can be interpreted from such a message or collection of messages. Information can be recorded or transmitted. It can be recorded as...

 is also a form of power, in the case of two agents entering into a contract; if one agent knows that their deal with turn out significantly better, or worse, than the other suspects, then they are exercising a form of informational economic power (see information asymmetry

Information asymmetry

In economics and contract theory, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. This creates an imbalance of power in transactions which can sometimes cause the transactions to go awry, a kind of market failure...

).

Other references

• Vatiero M. (2009), Understanding Power. A 'Law and Economics' Approach, VDM Verlag. ISBN 9783639202656 http://sites.google.com/site/massimilianovatiero/book