Deterministic Nonparametric Market Power Tests: An Empirical Investigation
A review of recent literature reflects the development of several deterministic nonparametric market power tests. We use Monte Carlo experiments to evaluate the veracity of four monopolistic and four monopsonistic market power tests that use the deterministic nonparametric approach. The experiments are implemented using data from ten known market structures. When results are compared to Raper, Love, and Shumway's (1999) findings concerning parametric market power tests in the Bresnahan-Lau tradition, we find that the parametric tests perform well while only two of the nonparametric tests appear able to identify market power.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Postal: Justin S. Morrill Hall of Agriculture, 446 West Circle Dr., Rm 202, East Lansing, MI 48824-1039|
Phone: (517) 355-4563
Fax: (517) 432-1800
Web page: http://www.aec.msu.edu/agecon/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul J. Driscoll & S. Murthy Kambhampaty & Wayne D. Purcell, 1997. "Nonparametric Tests of Profit Maximization in Oligopoly with Application to the Beef Packing Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 872-879.
- Lambert, David K., 1994. "Technological Change In Meat And Poultry-Packing And Processing," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(02), December.
- Jean-Paul Chavas & Thomas L. Cox, 1995. "On Nonparametric Supply Response Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 80-92.
- Appelbaum, Elie, 1979. "Testing price taking behavior," Journal of Econometrics, Elsevier, vol. 9(3), pages 283-294, February.
- H. Alan Love & C. Richard Shumway, 1994. "Nonparametric Tests for Monopsonistic Market Power Exertion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(5), pages 1156-1162.
- Ussif, Al-Amin M. & Lambert, David K., 1998. "Testing For Noncompetitive Behavior In The U.S. Food Industry," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20978, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Varian, Hal R., 1990. "Goodness-of-fit in optimizing models," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 125-140.
- Hanoch, Giora & Rothschild, Michael, 1972. "Testing the Assumptions of Production Theory: A Nonparametric Approach," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 256-75, March-Apr.
- Kellie Curry Raper & H. Alan Love & C. Richard Shumway, 2007. "Distinguishing the Source of Market Power," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 78-90.
- Varian, Hal R., 1985. "Non-parametric analysis of optimizing behavior with measurement error," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 445-458.
When requesting a correction, please mention this item's handle: RePEc:ags:midasp:11757. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.