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Testing Oligopolistic And Oligopsonistic Behaviour: An Application To The Us Meat‐Packing Industry

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  • A. M. Azzam
  • E. Pagoulatos

Abstract

This paper extends the conjectural approach in industrial organisation to the analysis of imperfections in output and factor markets. Starting from the specification of a production function, the econometric analysis is based on the formulation and estimation of a simultaneous‐equation model consisting of a production function, first‐order conditions associated with factor employment, and two conjectural elasticities to parameterise the industry's oligopoly and oligopsony equilibria. As an example, we provide an application to the US meat‐packing industry. Our results suggest that the industry exercises market power in both the output (meat) market and the factor (live animal) market.

Suggested Citation

  • A. M. Azzam & E. Pagoulatos, 1990. "Testing Oligopolistic And Oligopsonistic Behaviour: An Application To The Us Meat‐Packing Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(3), pages 362-370, September.
    • Handle: RePEc:bla:jageco:v:41:y:1990:i:3:p:362-370
    DOI: 10.1111/j.1477-9552.1990.tb00652.x
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    References listed on IDEAS

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    1. Schroeter, John R, 1988. "Estimating the Degree of Market Power in the Beef Packing Industry," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 158-162, February.
    2. Gollop, Frank M. & Roberts, Mark J., 1979. "Firm interdependence in oligopolistic markets," Journal of Econometrics, Elsevier, vol. 10(3), pages 313-331, August.
    3. Geroski, Paul A, 1988. "In Pursuit of Monopoly Power: Recent Quantitative Work in Industrial Economics," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 3(2), pages 107-123, April.
    4. Roberts, Mark J., 1984. "Testing oligopolistic behavior," International Journal of Industrial Organization, Elsevier, vol. 2(4), pages 367-383, December.
    5. Cowling, Keith & Waterson, Michael, 1976. "Price-Cost Margins and Market Structure," Economica, London School of Economics and Political Science, vol. 43(171), pages 267-274, August.
    6. Appelbaum, Elie, 1982. "The estimation of the degree of oligopoly power," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 287-299, August.
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