Empirical measurement of market power /
Recently elevated interest in new empirical industrial
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| Format: | Thesis Book |
| Language: | English |
| Published: |
[Place of publication not identified] :
[publisher not identified] ;
1996.
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| Subjects: | |
| Online Access: | http://proxy.library.tamu.edu/login?url=http://proquest.umi.com/pqdweb?did=739653601&sid=1&Fmt=2&clientId=2945&RQT=309&VName=PQD |
| Summary: | Recently elevated interest in new empirical industrial organization (NEIO) studies has contributed significantly to developing improved measures of market power exertion. This study advances that effort by: (1) extending the NEIO method to estimate both direction and magnitude of market power exertion, even when the direction of market power exertion is ambiguous, (2) developing a new nonparametric test for market power exertion which has a statistical interpretation, and (3) assessing currently used nonparametric and nonstructural market power tests to determine which methods distinguish the source of market power exertion. The first essay, "Flexpower: A Flexible Test for Market Power Exertion," extends traditional NEIO methods by introducing a composite model that nests both monopolistic and monopsonistic market power exertion. Using Monte Carlo simulation, this model correctly determines the source of market power and correctly estimates technology parameters. The second essay, "A Nonparametric Statistical Test for Monopsony Market Power Exertion," introduces a nonparametric market power test akin to maximum likelihood estimation to assess monopsony power exertion. The test incorporates a market power index in a stochastic framework and yields a probabilistic interpretation for market power exertion. Results from Monte Carlo experiments indicate that the test performs well in distinguishing competitive from noncompetitive behavior, monopsony from duopsony and competitive behavior, and duopsony from monopsony and competitive behavior. The third essay "Distinguishing the Source of Market Power: An Application to Cigarette Manufacturing" compares nonstructural and nonparametric market power tests using data from the cigarette manufacturing industry. Nonstructural market power tests cannot distinguish between monopoly and monopsony market power exertion. Nonparametric market power tests, however, do not exhibit this weakness. Results indicate that market power in the tobacco industry, previously attributed to monopoly power exertion, should be attributed to monopsony market power in the upstream tobacco market. |
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| Item Description: | Vita. "Major Subject: Agricultural Economics". |
| Physical Description: | ix, 165 leaves : illustrations ; 28 cm. Issued also on microfiche from University Microfilms Inc. |
| Bibliography: | Includes bibliographical references: pages 106-110. |