Nonparametric Tests of Profit Maximization in Oligopoly with Application to the Beef Packing Industry
AbstractIn this paper, we develop new, nonparametric methods of testing for static profit maximization given noncompetitive behavior. Repeated application of the test yields “maximum likelihood” estimates of the degree of noncompetitive behavior. Using plant-level data, these newly developed nonparametric methods are employed to test the hypothesis that beef packers are profit maximizers and to measure the extent to which packers influence prices in fed-cattle markets. Copyright 1997, Oxford University Press.
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Bibliographic InfoArticle provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.
Volume (Year): 79 (1997)
Issue (Month): 3 ()
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- Koontz, Stephen R. & Purcell, Wayne D., 2000. "Research Programs To Address Price Discovery Concerns," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36421, Western Agricultural Economics Association.
- Stephen R. Koontz & John D. Lawrence, 2010. "Impacts of alternative marketing agreement cattle procurement on packer costs, gross margins, and profits: evidence from plant-level profit and loss data," Agribusiness, John Wiley & Sons, Ltd., vol. 26(1), pages 1-24.
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- Kellie Curry Raper & Corinna Noelke, 2004. "Determining market power exertion between buyers and sellers: are nonparametrics a viable alternative?," Applied Economics, Taylor & Francis Journals, vol. 36(20), pages 2265-2274.
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