Econometric issues related to identification of the market power parameter

Stephen Devadoss, Jeff Luckstead, Ron Mittelhammer

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

This study demonstrates the crucial role the specification of the cost function plays in identifying the market power parameter in autarky models. For constant marginal cost or marginal cost with quantity interacting with input prices, the market power parameter in autarky models in identified without a rotation of the demand curve. If a comodity is sold in both domestic and foreign markets, the market power parameters are identified regardless of the specific form of the marginal cost and demand specifications.

Original languageEnglish
Pages (from-to)4569-4574
Number of pages6
JournalApplied Economics
Volume45
Issue number32
DOIs
StatePublished - 2013

Keywords

  • Conjectural elasticities
  • Identification
  • Market power
  • Trade

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