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Price Leadership and Welfare Losses in U.S. Manufacturing

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  • Gisser, Micha

Abstract

A model of price leadership is used to estimate the welfare losses dueto monopoly in U.S. Manufacturing. Given that the leaders behave independently, an hypothesis confirmed empirically, the deadweight lossis estimated at 0.114 percent of GNP based on a sample of 445 four-digit industries. This estimate lends strong support to Arnold C.Harberger's finding of thirty years ago. Copyright 1986 by American Economic Association.

Suggested Citation

  • Gisser, Micha, 1986. "Price Leadership and Welfare Losses in U.S. Manufacturing," American Economic Review, American Economic Association, vol. 76(4), pages 756-767, September.
  • Handle: RePEc:aea:aecrev:v:76:y:1986:i:4:p:756-67
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    Cited by:

    1. D. P. T. Young, 2000. "Firms' Market Power, Endogenous Preferences and the Focus of Competition Policy," Review of Political Economy, Taylor & Francis Journals, vol. 12(1), pages 73-87.
    2. repec:bla:jindec:v:65:y:2017:i:1:p:194-213 is not listed on IDEAS
    3. Yoon, Seok, 2004. "Welfare losses due to monopoly: Korea's case," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 945-957, December.
    4. Pascal Lavergne & Vincent Réquilllart & Michel Simioni, 1998. "Pertes de bien-être et pouvoir de marché dans l'agro-alimentaire français," Économie et Prévision, Programme National Persée, vol. 135(4), pages 77-86.
    5. Young, David P. T., 1997. "Dominant firms, price leadership and the measurement of monopoly welfare losses," International Journal of Industrial Organization, Elsevier, vol. 15(5), pages 533-533, August.
    6. Browning, Edgar K., 1997. "A neglected welfare cost of monopoly--and most other product market distortions," Journal of Public Economics, Elsevier, vol. 66(1), pages 127-144, October.
    7. Bergtold, Jason S. & Akobundu, Eberechukwu & Peterson, Everett B., 2004. "The FAST Method: Estimating Unconditional Demand Elasticities for Processed Foods in the Presence of Fixed Effects," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(02), August.

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