As large generalists consolidate the centre of a market, the freed periphery supports more specialists, so concentration and variety can rise together.
Carroll's 1985 finding on newspapers ran against the assumption that consolidation kills diversity. Generalists competing for the centre abandon the edges, and the resources there sustain specialists who could not have survived against a less concentrated field. The pattern recurs in brewing, restaurants and broadcasting.
In practice
- A market dominated by three national chains supports more independent specialists than one with twenty regional firms.
- A consolidating industry produces both fewer competitors and more niches, which look contradictory in the aggregate figures.