When is Concentration Beneficial?
This paper separates market power and efficiency effects of concentration in a sample of 255 U.S. manufacturing industries and computes welfare changes from rises in concentration. The empirical findings reveal that in nearly two-third of the cases, consumers lose as efficiency gains are generally pocketed by the industries. From an aggregate welfare standpoint, concentration is found to be beneficial in nearly 70% of the cases, mostly for low and moderate levels of concentration being particularly against the public interest in highly concentrated markets. Overall, the results support the existing U.S. Federal Trade Commission guidelines for approval of mergers.
|Date of creation:||2001|
|Contact details of provider:|| Postal: 1376 Storrs Road, U-21, Storrs, Connecticut 06269-4021|
Web page: http://www.zwickcenter.uconn.edu
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.:
- Golan, Amos & Judge, George & Perloff, Jeffrey M, 1996.
"Estimating the Size Distribution of Firms Using Government Summary Statistics,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 44(1), pages 69-80, March.
- Golan, Amos & Judge, George G. & Perloff, Jeffrey M., 1995. "Estimating the size distribution of firms using government summary statistics," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt14b416tk, Department of Agricultural & Resource Economics, UC Berkeley.
- Allen N. Berger & Timothy H. Hannan, 1998. "The Efficiency Cost Of Market Power In The Banking Industry: A Test Of The "Quiet Life" And Related Hypotheses," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 454-465, August.
- Allen N. Berger & Timothy H. Hannan, 1994. "The efficiency cost of market power in the banking industry: a test of the "quiet life" and related hypotheses," Finance and Economics Discussion Series 94-36, Board of Governors of the Federal Reserve System (U.S.).
- Allen Berger & Timothy Hannan, 1994. "The Efficiency Cost of Market Power in the Banking Industry: A Test of the 'Quiet Life' and Related Hypotheses," Center for Financial Institutions Working Papers 94-29, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Martin, Stephen, 1988. "Market Power and/or Efficiency?," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 331-335, May.
- Azzam, Azzeddine M, 1997. "Measuring Market Power and Cost-Efficiency Effects of Industrial Concentration," Journal of Industrial Economics, Wiley Blackwell, vol. 45(4), pages 377-386, December. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:zwi:fpcrep:062. 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: ()
If references are entirely missing, you can add them using this form.