Endogeneity in the Concentration-Price Relationship: Causes, Consequences, and Cures
The ordinary least squares estimator of the effect of concentration on price is biased for two reasons. First, performance feeds back into structure, causing a simultaneous equations bias. Second, as a function of outputs or revenues, measured concentration is correlated with determinants of price that are, at best, measured with error, so measured concentration is correlated with the error term. With panel data, fixed-effects procedures can be combined with instrumental variables to eliminate bias from both sources. In concentration-price regressions for the airline industry, the bias can be substantial and negative. Copyright 1993 by Blackwell Publishing Ltd.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 41 (1993)
Issue (Month): 4 (December)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0022-1821|
When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:41:y:1993:i:4:p:431-38. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.