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Econometric issues related to identification of the market power parameter

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  • Stephen Devadoss
  • Jeff Luckstead
  • Ron Mittelhammer

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.

Suggested Citation

  • Stephen Devadoss & Jeff Luckstead & Ron Mittelhammer, 2013. "Econometric issues related to identification of the market power parameter," Applied Economics, Taylor & Francis Journals, vol. 45(32), pages 4569-4574, November.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:32:p:4569-4574
    DOI: 10.1080/00036846.2013.795277
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    Cited by:

    1. Luckstead, Jeff & Devadoss, Stephen & Mittelhammer, Ron, 2015. "Imperfect Competition between Florida and Sao Paulo (Brazil) Orange Juice Producers in the U.S. and European Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(1), pages 1-15.
    2. Luckstead, Jeff & Devadoss, Stephen & Mittelhammer, Ron C., 2014. "Apple Export Competition between the United States and China in the Association of Southeast Asian Nations," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 46(4), pages 635-647, November.

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