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Degree of Instant Competition! Estimation of Market Power in India’s Instant Coffee Market

  • Satish Y. Deodhar

    (Indian Institute of Management, Vastrapur, Ahmedabad - 380015, India)

  • Vivek Pandey

    (Indian Institute of Management, Vastrapur, Ahmedabad - 380015, India)

Registered author(s):

    New competition policy seeks to promote competition and increase market efficiency. In fact, degree of price transmission between farmers and final consumers depends on degree of competition in processing sector. Moreover, trade liberalization policy is expected to influence domestic markets. Hence, it becomes imperative to know the degree of competition in various industries. India's instant coffee market is a duopoly of the firms- Nestlé and Hindustan Lever. We econometrically estimate the degree of competition in this market. Results indicate that market is not characterized by collusive behaviour. It is close to perfect competition although we cannot reject the Cournot-Nash behaviour.

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    Article provided by Department of Economics, Delhi School of Economics in its journal Indian Economic Review.

    Volume (Year): 43 (2008)
    Issue (Month): 2 (December)
    Pages: 253-264

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    Handle: RePEc:dse:indecr:v:43:y:2008:i:2:p:253-264
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