Testable implications for the Bresnahan-Lau model of market competition
AbstractWe derive necessary and sufficient testable implications on the reduced form price and quantity functions for the Bresnahan-Lau model of market competition. The conditions are twofold. A first condition relates to the fact that the reduced form price function should correspond to an inverse demand function. The second condition captures that the degree of competition must be invariant to changes in the exogenous variables.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces10.11.
Date of creation: Apr 2010
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-23 (All new papers)
- NEP-COM-2010-12-23 (Industrial Competition)
- NEP-IND-2010-12-23 (Industrial Organization)
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