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Determining market power exertion between buyers and sellers: are nonparametrics a viable alternative?

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  • Kellie Curry Raper
  • Corinna Noelke

Abstract

A review of recent literature reveals the development of several deterministic non-parametric (DNP) tests of market power. The performance of selected DNP market power tests is ascertained to determine their usefulness as an alternative to data-hungry parametric market power tests. This assessment is carried out through implementation of Monte Carlo experiments using data sets from ten known market structures. Only two of the six DNP tests appear able to satisfactorily identify market power.

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  • Kellie Curry Raper & Corinna Noelke, 2004. "Determining market power exertion between buyers and sellers: are nonparametrics a viable alternative?," Applied Economics, Taylor & Francis Journals, vol. 36(20), pages 2265-2274.
    • Handle: RePEc:taf:applec:v:36:y:2004:i:20:p:2265-2274
    DOI: 10.1080/0003684042000281570
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    Cited by:

    1. Jean-Philippe Gervais & Stephen Devadoss, 2006. "Estimating bargaining strengths of Canadian chicken producers and processors using a bilateral monopoly framework," Agribusiness, John Wiley & Sons, Ltd., vol. 22(2), pages 159-173.
    2. Ronchi, Loraine, 2006. "Fairtrade and market failures in agricultural commodity markets," Policy Research Working Paper Series 4011, The World Bank.

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