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Measuring Market Power in Multi-Product Oligopolies: The U.S. Meat Industry

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Author Info

  • Schroeter, John R.
  • Azzam, Azzeddine M.

Abstract

This paper develops and estimates an economic model for measuring market power in a quantity-setting oligopoly engaged in the joint production of demand-related goods. The model, which allows for firms' conjectures about both same and cross-market responses to own output variation, is applied to the U.S. meat (beef and pork) industry. The hypothesis that the industry's equilibrium reflects price taking behaviour is rejected. The hypothesis of no cross effects cannot be rejected. Roughly half of the farm-to-retail price spreads for beef and pork appear to be attributable to market power.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 11112.

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Date of creation: 01 Oct 1990
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Publication status: Published in Applied Economics, October 1990, vol. 22 no. 10, pp. 1365-1376
Handle: RePEc:isu:genres:11112

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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