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Estimating Market Power in the US Copper Industry

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  • Claudio Agostini

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Abstract

Before 1978, most of the domestic copper production in the US and an important share of imports were traded at a price set by the major US producers. At the same time, the rest of the world was trading copper at prices determined in auction markets. This two-price system ended in 1978, when the largest US producers began using the Comex price of refined copper as a benchmark for setting their prices. Using this regime shift, I empirically test the competitive behavior of the US copper industry before 1978. The results show that copper prices were close to the levels predicted by a competitive model of the industry. Copyright Springer 2006

Suggested Citation

  • Claudio Agostini, 2006. "Estimating Market Power in the US Copper Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(1), pages 17-39, February.
  • Handle: RePEc:kap:revind:v:28:y:2006:i:1:p:17-39
    DOI: 10.1007/s11151-006-0006-8
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    Citations

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    Cited by:

    1. Juan-Pablo Montero & Juan Ignacio Guzman, 2010. "OUTPUT-EXPANDING COLLUSION IN THE PRESENCE OF A COMPETITIVE FRINGE -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 58(1), pages 106-126, March.
    2. Pothen, Frank, 2013. "The metal resources (METRO) model: A dynamic partial equilibrium model for metal markets applied to rare earth elements," ZEW Discussion Papers 13-112, ZEW - Leibniz Centre for European Economic Research.
    3. Pieroni, Luca & Ricciarelli, Matteo, 2008. "Modelling dynamic storage function in commodity markets: Theory and evidence," Economic Modelling, Elsevier, vol. 25(5), pages 1080-1092, September.
    4. Li, Haizheng & Luo, Jifeng, 2008. "Industry consolidation and price in the US linerboard industry," Journal of Forest Economics, Elsevier, vol. 14(2), pages 93-115, April.
    5. Cynthia Lin, C.-Y. & Wagner, Gernot, 2007. "Steady-state growth in a Hotelling model of resource extraction," Journal of Environmental Economics and Management, Elsevier, vol. 54(1), pages 68-83, July.
    6. repec:spr:minecn:v:31:y:2018:i:1:d:10.1007_s13563-017-0126-7 is not listed on IDEAS
    7. Luca Pieroni & Matteo Ricciarelli, 2005. "Testing rational expectations in primary commodity markets," Applied Economics, Taylor & Francis Journals, vol. 37(15), pages 1705-1718.
    8. Christopher Snyder, 2006. "Introduction to the 2005 International Industrial Organization Conference Special Issue," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(1), pages 1-2, February.
    9. Pothen, Frank, 2014. "Dynamic market power in an exhaustible resource industry: The case of rare earth elements," ZEW Discussion Papers 14-005, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    Keywords

    Copper industry; market power; D40; D43; L13; L61; L72;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources

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