Journal article
Estimating market power in the presence of capacity constraints: An application to high-fructose corn sweetener
International journal of industrial organization, Vol.24(2), pp.251-267
03/01/2006
DOI: 10.1016/j.ijindorg.2005.09.003
Abstract
We develop a structural econometric model within which to measure market power in an industry that has capacity constraints. We implement our empirical framework using quarterly data from the market for high-fructose corn sweetener between 1980:1 and 2000:4. We demonstrate that ignoring the natural restrictions, from the capacity constraints as well as the existence of a near-perfect substitute (sugar in this case), can lead to inconsistent estimates. This may cause researchers to overestimate the market power of firms. These results have implications for anti-trust litigation.
Details
- Title: Subtitle
- Estimating market power in the presence of capacity constraints: An application to high-fructose corn sweetener
- Creators
- Bjarne Brendstrup - Aarhus Business CollegeHarry J. Paarsch - University of IowaJohn L. Solow - University of Iowa
- Resource Type
- Journal article
- Publication Details
- International journal of industrial organization, Vol.24(2), pp.251-267
- DOI
- 10.1016/j.ijindorg.2005.09.003
- ISSN
- 0167-7187
- eISSN
- 1873-7986
- Publisher
- Elsevier B.V
- Number of pages
- 17
- Language
- English
- Date published
- 03/01/2006
- Academic Unit
- Economics
- Record Identifier
- 9984963056302771
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