Advanced Search
MyIDEAS: Login

An Empirical Model of Capacity Expansion and Pricing in an Oligopoly with Barometric Price Leadership: A Case Study of the Newsprint Industry in North America

Contents:

Author Info

  • Booth, D L, et al
Registered author(s):

    Abstract

    The weak form of oligopolistic coordination in pricing and capacity expansion of the North American newsprint industry is examined. A dynamic model consisting of demand, price, and regional capacity equations is estimated for the years 1965 to 1986. The reference price in the industry is hypothesized to be based on either adjusted full-cost pricing or mark-up over marginal cost pricing. Neither hypothesis was rejected, confirming that either pricing rule better describes industry practices than marginal cost pricing. The determinant of mark-up levels was the industry operating rate. The model also showed that capacity expansion was negatively related to the concentration ratio. Coauthors are V. Kanetkar, I. Vertinsky, and D. Whistler. Copyright 1991 by Blackwell Publishing Ltd.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://links.jstor.org/sici?sici=0022-1821%28199103%2939%3A3%3C255%3AAEMOCE%3E2.0.CO%3B2-7&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Industrial Economics.

    Volume (Year): 39 (1991)
    Issue (Month): 3 (March)
    Pages: 255-76

    as in new window
    Handle: RePEc:bla:jindec:v:39:y:1991:i:3:p:255-76

    Contact details of provider:
    Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821

    Order Information:
    Web: http://www.blackwellpublishing.com/subs.asp?ref=0022-1821

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Li, Haizheng & Luo, Jifeng, 2008. "Industry consolidation and price in the US linerboard industry," Journal of Forest Economics, Elsevier, vol. 14(2), pages 93-115, April.
    2. Besanko, David & Doraszelski, Ulrich & Lu, Lauren Xiaoyuan & Satterthwaite, Mark, 2008. "Lumpy Capacity Investment and Disinvestment Dynamics," CEPR Discussion Papers 6788, C.E.P.R. Discussion Papers.
    3. Marshall, Robert C. & Marx, Leslie M. & Raiff, Matthew E., 2008. "Cartel price announcements: The vitamins industry," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 762-802, May.
    4. Lapo Filistrucchi, 2005. "The Impact of Internet on the Market for Daily Newspapers in Italy," Economics Working Papers ECO2005/12, European University Institute.
    5. Andrew Wood, 2005. "Investment interdependence and the coordination of lumpy investments: evidence from the British brick industry," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 37-49.
    6. Besanko, David & Doraszelski, Ulrich & Lu, Lauren Xiaoyuan & Satterthwaite, Mark, 2010. "On the role of demand and strategic uncertainty in capacity investment and disinvestment dynamics," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 383-389, July.
    7. Ivaldi, Marc & Jullien, Bruno & Rey, Patrick & Seabright, Paul & Tirole, Jean, 2003. "The Economics of Tacit Collusion," IDEI Working Papers 186, Institut d'Économie Industrielle (IDEI), Toulouse.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:39:y:1991:i:3:p:255-76. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.