Pub Date : 2015-09-01DOI: 10.7208/9780226426532-003
D. Bogart
Many markets are limited by laws and customs enforced by political and religious authorities. North, Wallis, and Weingast (2009) argue that the transition from limited access requires a series of steps like rule of law for elites and the creation of perpetually lived organizations. This paper studies how these steps were taken in England in the case of the East Indian market. The East India Company had a legal monopoly over all trade between England and modern day India and China, but its privileges and property were far from secure. The king and parliament authorized interlopers to enter the Company’s market and forced the Company to make loans to retain its monopoly. A secure monopoly only emerged in the mid-eighteenth century when political stability and fiscal capacity increased. However, liberalization of the market had to wait several more decades. A fiscal and political partnership between the government and the Company kept its monopoly stable until a confluence of events in 1813 brought it to an end.
{"title":"The East Indian Monopoly and the Transition from Limited Access in England, 1600-1813","authors":"D. Bogart","doi":"10.7208/9780226426532-003","DOIUrl":"https://doi.org/10.7208/9780226426532-003","url":null,"abstract":"Many markets are limited by laws and customs enforced by political and religious authorities. North, Wallis, and Weingast (2009) argue that the transition from limited access requires a series of steps like rule of law for elites and the creation of perpetually lived organizations. This paper studies how these steps were taken in England in the case of the East Indian market. The East India Company had a legal monopoly over all trade between England and modern day India and China, but its privileges and property were far from secure. The king and parliament authorized interlopers to enter the Company’s market and forced the Company to make loans to retain its monopoly. A secure monopoly only emerged in the mid-eighteenth century when political stability and fiscal capacity increased. However, liberalization of the market had to wait several more decades. A fiscal and political partnership between the government and the Company kept its monopoly stable until a confluence of events in 1813 brought it to an end.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117214996","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the strategic disclosure of demand information and product-market strategies of duopolists. In a setting where firms may fail to receive information, we show that firms selectively disclose information in equilibrium in order to influence their competitors product-market strategy. Subsequently, we analyze the firms behavior in a laboratory experiment. We find that subjects often use selective disclosure strategies, and this finding appears to be robust to changes in the information structure, the mode of competition, and the degree of product differentiation. Moreover, subjects in our experiment display product-market conduct that is largely consistent with theoretical predictions.
{"title":"Strategic Disclosure of Demand Information by Duopolists: Theory and Experiment","authors":"J. Jansen, A. Pollak","doi":"10.2139/ssrn.2637893","DOIUrl":"https://doi.org/10.2139/ssrn.2637893","url":null,"abstract":"We study the strategic disclosure of demand information and product-market strategies of duopolists. In a setting where firms may fail to receive information, we show that firms selectively disclose information in equilibrium in order to influence their competitors product-market strategy. Subsequently, we analyze the firms behavior in a laboratory experiment. We find that subjects often use selective disclosure strategies, and this finding appears to be robust to changes in the information structure, the mode of competition, and the degree of product differentiation. Moreover, subjects in our experiment display product-market conduct that is largely consistent with theoretical predictions.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130234553","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper discusses a selected literature on continuous-time option games models, providing new insights and extensions. The paper analyzes both symmetrical and asymmetrical duopoly under uncertainty, including issues like preemption, non-binding collusion, perfect-Nash equilibriums, first-mover advantage, mixed strategies, probability of mistake with simultaneous exercise, competitive advantage effect, etc. In the first model, the demand follows a stochastic process, whereas in the second model the exchange rate follows a stochastic process. This paper presents two equivalent ways to calculate the leader and follower values and thresholds, the differential and the integral methods. The paper extends the Joaquin and Buttler’s model by considering mixed strategies in asymmetric duopoly and other extensions.
{"title":"Continuous-Time Option Games: Review of Models and Extensions","authors":"Marco Antonio Guimarães Dias, Jose Teixeira","doi":"10.17578/14-3/4-3","DOIUrl":"https://doi.org/10.17578/14-3/4-3","url":null,"abstract":"This paper discusses a selected literature on continuous-time option games models, providing new insights and extensions. The paper analyzes both symmetrical and asymmetrical duopoly under uncertainty, including issues like preemption, non-binding collusion, perfect-Nash equilibriums, first-mover advantage, mixed strategies, probability of mistake with simultaneous exercise, competitive advantage effect, etc. In the first model, the demand follows a stochastic process, whereas in the second model the exchange rate follows a stochastic process. This paper presents two equivalent ways to calculate the leader and follower values and thresholds, the differential and the integral methods. The paper extends the Joaquin and Buttler’s model by considering mixed strategies in asymmetric duopoly and other extensions.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129961705","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We show that supply functions cannot be classified as either strategic complements or substitutes according to the twofold criterion advanced by Bulow et al. (1985). This is because while the slope of the best reply is univocally positive, this is not the case with the sign of the cross derivative of marginal profit. We first show this discrepancy in the original Klemperer and Meyer (1989) setting, and then in a linear-quadratic model of differentiated duopoly. We further confirm and strengthen our result by proving that the game in supply functions is neither supermodular nor submodular.
{"title":"Investigating the Strategic Nature of Supply Functions in Oligopoly","authors":"Flavio Delbono, L. Lambertini","doi":"10.2139/ssrn.2617213","DOIUrl":"https://doi.org/10.2139/ssrn.2617213","url":null,"abstract":"We show that supply functions cannot be classified as either strategic complements or substitutes according to the twofold criterion advanced by Bulow et al. (1985). This is because while the slope of the best reply is univocally positive, this is not the case with the sign of the cross derivative of marginal profit. We first show this discrepancy in the original Klemperer and Meyer (1989) setting, and then in a linear-quadratic model of differentiated duopoly. We further confirm and strengthen our result by proving that the game in supply functions is neither supermodular nor submodular.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"2010 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133194450","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We analyze a general model in which, at each echelon of the supply process, an arbitrary number of firms compete, offering one or multiple products to some or all of the firms at the next echelon, with firms at the most downstream echelon selling to the end consumer. At each echelon, the offered products are differentiated and the firms belonging to this echelon engage in price competition. The model assumes a general set of piece-wise linear consumer demand functions for all products (potentially) brought to the consumer market, where each product's demand volume may depend on the retail prices charged for all products; consumers' preferences over the various product/retailer combinations are general and asymmetric. Similarly the cost rates incurred by the firms at the most upstream echelon are general as well.We initially study a two-echelon sequential oligopoly with competing suppliers, each selling multiple products through a pool of multiple competing retailers. We characterize the equilibrium behavior under linear price-only contracts. In the second stage, given wholesale prices selected in the first stage, all retailers simultaneously decide on their retail prices to maximize their total profits among all products of all suppliers they choose to do business with. In the first stage, the suppliers anticipate the retailers' responses and all suppliers simultaneously maximize their total profits from all channels by selecting the wholesale prices. We show that in this two-stage competition model, a subgame perfect Nash equilibrium always exists. Multiple subgame perfect equilibria may arise but, if so, all equilibria are equivalent in the sense of generating unique demands and profits for all firms. We subsequently generalize our results to supply chain models with an arbitrary set of echelons, and show how all equilibrium performance measures can be computed with an efficient recursive scheme. Moreover, we establish how changes in the structure of the supply chain network, or changes in the model parameters, in particular, exogenous cost rates, or intercept values in the demand functions, impact on the system-wide equilibrium. These comparative statics results allow for the quantification of cost pass-through effects and the measurement and characterization of the brand value of different retailers and suppliers.
{"title":"Sequential Multi-Product Price Competition in Supply Chain Networks","authors":"A. Federgruen, Ming Hu","doi":"10.2139/ssrn.2049520","DOIUrl":"https://doi.org/10.2139/ssrn.2049520","url":null,"abstract":"We analyze a general model in which, at each echelon of the supply process, an arbitrary number of firms compete, offering one or multiple products to some or all of the firms at the next echelon, with firms at the most downstream echelon selling to the end consumer. At each echelon, the offered products are differentiated and the firms belonging to this echelon engage in price competition. The model assumes a general set of piece-wise linear consumer demand functions for all products (potentially) brought to the consumer market, where each product's demand volume may depend on the retail prices charged for all products; consumers' preferences over the various product/retailer combinations are general and asymmetric. Similarly the cost rates incurred by the firms at the most upstream echelon are general as well.We initially study a two-echelon sequential oligopoly with competing suppliers, each selling multiple products through a pool of multiple competing retailers. We characterize the equilibrium behavior under linear price-only contracts. In the second stage, given wholesale prices selected in the first stage, all retailers simultaneously decide on their retail prices to maximize their total profits among all products of all suppliers they choose to do business with. In the first stage, the suppliers anticipate the retailers' responses and all suppliers simultaneously maximize their total profits from all channels by selecting the wholesale prices. We show that in this two-stage competition model, a subgame perfect Nash equilibrium always exists. Multiple subgame perfect equilibria may arise but, if so, all equilibria are equivalent in the sense of generating unique demands and profits for all firms. We subsequently generalize our results to supply chain models with an arbitrary set of echelons, and show how all equilibrium performance measures can be computed with an efficient recursive scheme. Moreover, we establish how changes in the structure of the supply chain network, or changes in the model parameters, in particular, exogenous cost rates, or intercept values in the demand functions, impact on the system-wide equilibrium. These comparative statics results allow for the quantification of cost pass-through effects and the measurement and characterization of the brand value of different retailers and suppliers.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130841786","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Russian Abstract: Анализ практики регулирования ценовой дискриминации показывает, что в большинстве случаев решения антимонопольных органов оспариваются в суде и в более чем 50% случаев отменяются. Кроме того, с 2009 по 2013 год в арбитражных судах различных инстанций было рассмотрено 227 дел о нарушении антимонопольного законодательства по подпункту 6 пункта 1 статьи 10 Закона о защите конкуренции № 135, что говорит о высокой нагрузке на судебную систему и антимонопольные органы при регулировании ценовой дискриминации.В результате применения предложенных методов для оценки показателей ценовой дискриминации предлагается сформировать практику формирования цен на сырьевые товары в условиях олигополии с целью формирования верхней границы цены, что позволит снизить ценовую дифференциацию между покупателями, не соответствующую затратам на осуществление продаж.Также с целью снижения возможностей осуществления ценовой дискриминации предлагаются подходы к совершенствованию практики осуществления биржевых торгов на рынках сырьевых товаров.English Abstract: Analysis of the regulatory practice of price discrimination shows that in most cases the decision of antitrust authorities challenged in court and in more than 50% of cases are canceled. In addition, from 2009 to 2013 in the arbitration courts of various levels was considered 227 cases of violation of the antimonopoly legislation on sub 6 paragraph 1 of Article 10 of the Law on Protection of Competition number 135, indicating a high load on the judicial system and anti-monopoly authorities in the regulation of price discrimination.As a result of the proposed methods for the assessment of indicators proposed form of price discrimination practices of formation of commodity prices under oligopoly to form the upper limit of the price, which will reduce the price differentiation between buyers and not the associated costs for the implementation of sales.Also, to reduce the capacity to implement price discrimination suggests approaches to improve the practices of the exchange trading in commodity markets.
俄罗斯Abstract:对价格歧视监管实践的分析表明，在大多数情况下，反垄断机构的裁决受到质疑，超过50%的案件被取消。此外,2009年至2013年各级法院仲裁法院审议227违反反垄断法案10保护法》第6条第1款竞争№135,谈论高负荷司法系统和反垄断机构监管价格歧视。由于采用了评估价格歧视的方法，建议建立在寡头环境下的大宗商品价格形成的做法，以创造价格的上限，从而减少与销售成本不相称的购买者之间的价格差异。为了降低价格歧视的可能性，还提供了改善商品市场交易实践的方法。英语Abstract:在《最伟大的案例》中，反权威权威的挑战挑战了50%的案例。2009年from In addition to 2013 In the arbitration courts of《不同关卡was considered 227 cases of violation of the antimonopoly legislation on sub六个段落1 of文章10 of the Law on Protection of Competition number 135, indicating a high load on the judicial system and anti - authorities In the regulation of price discrimination)游戏。As a result of the proposed methods for the评估of indicators proposed form of price discrimination做法of组of商品prices under oligopoly to form the upper limit of the price, will reduce the price differentiation between buyers and not the associated成本for the传达of sales。Also，在社区市场上进行交易交易的风险评估是值得的。
{"title":"Оценка Показателей Ценовой Дискриминации На Олигопольных Рынках Сырьевых Товаров Российской Федерации (Assessment of Indicators of Price Discrimination on Oligopolistic Markets of Commodities of the Russian Federation)","authors":"E. Agapova, O. Smirnova, A. Elagina","doi":"10.2139/ssrn.2626358","DOIUrl":"https://doi.org/10.2139/ssrn.2626358","url":null,"abstract":"Russian Abstract: Анализ практики регулирования ценовой дискриминации показывает, что в большинстве случаев решения антимонопольных органов оспариваются в суде и в более чем 50% случаев отменяются. Кроме того, с 2009 по 2013 год в арбитражных судах различных инстанций было рассмотрено 227 дел о нарушении антимонопольного законодательства по подпункту 6 пункта 1 статьи 10 Закона о защите конкуренции № 135, что говорит о высокой нагрузке на судебную систему и антимонопольные органы при регулировании ценовой дискриминации.В результате применения предложенных методов для оценки показателей ценовой дискриминации предлагается сформировать практику формирования цен на сырьевые товары в условиях олигополии с целью формирования верхней границы цены, что позволит снизить ценовую дифференциацию между покупателями, не соответствующую затратам на осуществление продаж.Также с целью снижения возможностей осуществления ценовой дискриминации предлагаются подходы к совершенствованию практики осуществления биржевых торгов на рынках сырьевых товаров.English Abstract: Analysis of the regulatory practice of price discrimination shows that in most cases the decision of antitrust authorities challenged in court and in more than 50% of cases are canceled. In addition, from 2009 to 2013 in the arbitration courts of various levels was considered 227 cases of violation of the antimonopoly legislation on sub 6 paragraph 1 of Article 10 of the Law on Protection of Competition number 135, indicating a high load on the judicial system and anti-monopoly authorities in the regulation of price discrimination.As a result of the proposed methods for the assessment of indicators proposed form of price discrimination practices of formation of commodity prices under oligopoly to form the upper limit of the price, which will reduce the price differentiation between buyers and not the associated costs for the implementation of sales.Also, to reduce the capacity to implement price discrimination suggests approaches to improve the practices of the exchange trading in commodity markets.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122336832","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The axiomatic route to the foundation of contest success functions (CSF) has proved to be both useful and prolific. The standard approach in the literature is based on the decision-theoretic notion that choice probabilities should be independent of irrelevant alternatives (Skaperdas, Economic Theory 1996). The present paper develops an alternative approach that suggests itself once the contest is re-interpreted as a common-pool resource problem. Proceeding along these lines, new axiomatizations are obtained for a variety of popular classes of CSFs, including the logit, Tullock, and difference-form CSFs. The axiomatizations provided are particularly parsimonious in the important special case of two contestants.
{"title":"Contest Success Functions: The Common-Pool Perspective","authors":"Christian Ewerhart","doi":"10.2139/ssrn.2617189","DOIUrl":"https://doi.org/10.2139/ssrn.2617189","url":null,"abstract":"The axiomatic route to the foundation of contest success functions (CSF) has proved to be both useful and prolific. The standard approach in the literature is based on the decision-theoretic notion that choice probabilities should be independent of irrelevant alternatives (Skaperdas, Economic Theory 1996). The present paper develops an alternative approach that suggests itself once the contest is re-interpreted as a common-pool resource problem. Proceeding along these lines, new axiomatizations are obtained for a variety of popular classes of CSFs, including the logit, Tullock, and difference-form CSFs. The axiomatizations provided are particularly parsimonious in the important special case of two contestants.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"31 10","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120815954","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper aims at participating in the long-lasting debate about the analytical foundations of the Cournot equilibrium. In a homogeneous oligopoly, under standard regularity conditions, we prove that Cournot-Nash emerges both under (i) price competition and Cournot conjectures; and (ii) supply function competition with ex post market clearing. We demonstrate both results within a model of exogenous product differentiation.
{"title":"Cournot Retrouvé Under Price or Supply Function Competition","authors":"Flavio Delbono, L. Lambertini","doi":"10.2139/ssrn.2595581","DOIUrl":"https://doi.org/10.2139/ssrn.2595581","url":null,"abstract":"This paper aims at participating in the long-lasting debate about the analytical foundations of the Cournot equilibrium. In a homogeneous oligopoly, under standard regularity conditions, we prove that Cournot-Nash emerges both under (i) price competition and Cournot conjectures; and (ii) supply function competition with ex post market clearing. We demonstrate both results within a model of exogenous product differentiation.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122106484","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Many firms offer “core” and “side” goods in the sense that side-good consumption is conditional on core-good consumption. Airports are a common example where the supply of runway and terminal capacity is the core good and the supply of various concession services (for example, car rental services) is the side good. While side-good supply can be responsible for a major share in total revenue, monopoly regulation typically concentrates on the control of core-good prices (“core prices” in short). Whether market power can indeed be effectively controlled by the regulation of core prices alone then depends on whether core-good consumption is a function of the price for side goods. This study empirically shows that a one-dollar increase in the daily car rental price reduces passenger demand at 199 US airports by more than 0.36 percent. A major implication of our findings is that for the case of airports, the effective control of market power may require regulation of both prices for core and side goods.
{"title":"Can Market Power Be Controlled by Regulation of Core Prices Alone?: An Empirical Analysis of Airport Demand and Car Rental Price","authors":"Achim I. Czerny, Z. Shi, A. Zhang","doi":"10.2139/ssrn.2586967","DOIUrl":"https://doi.org/10.2139/ssrn.2586967","url":null,"abstract":"Many firms offer “core” and “side” goods in the sense that side-good consumption is conditional on core-good consumption. Airports are a common example where the supply of runway and terminal capacity is the core good and the supply of various concession services (for example, car rental services) is the side good. While side-good supply can be responsible for a major share in total revenue, monopoly regulation typically concentrates on the control of core-good prices (“core prices” in short). Whether market power can indeed be effectively controlled by the regulation of core prices alone then depends on whether core-good consumption is a function of the price for side goods. This study empirically shows that a one-dollar increase in the daily car rental price reduces passenger demand at 199 US airports by more than 0.36 percent. A major implication of our findings is that for the case of airports, the effective control of market power may require regulation of both prices for core and side goods.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-03-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126398045","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Panzar–Rosse H statistic is a commonly used measure of market power in banking. It is widely believed that H>0 is inconsistent with significant market power. This study rigorously disproves that perception. Instead, the possibility of H>0 under conditions of substantial market power turns out robust to the timing of banks’ actions, relative costs, choice of strategic variable, degree of product differentiation, strategy (static or dynamic), and degree of heterogeneity in banks’ conduct (collusive versus fringe), and hence may be common in practice.
{"title":"The Panzar-Rosse Revenue Test and Market Power in Banking","authors":"L. Spierdijk, Sherrill Shaffer","doi":"10.2139/ssrn.2519503","DOIUrl":"https://doi.org/10.2139/ssrn.2519503","url":null,"abstract":"The Panzar–Rosse H statistic is a commonly used measure of market power in banking. It is widely believed that H>0 is inconsistent with significant market power. This study rigorously disproves that perception. Instead, the possibility of H>0 under conditions of substantial market power turns out robust to the timing of banks’ actions, relative costs, choice of strategic variable, degree of product differentiation, strategy (static or dynamic), and degree of heterogeneity in banks’ conduct (collusive versus fringe), and hence may be common in practice.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124408895","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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