Measuring Market Power in the U.S. Aluminum Industry: A Residual Demand Approach

Measuring Market Power in the U.S. Aluminum Industry: A Residual Demand Approach This paper applies a refined market power test to examine market power in the U.S. aluminum industry. The study conducts a two-step analysis in which the inverse residual demand facing the industry is first estimated to generate the associate elasticity to infer market power, and then the inverse partial residual demand facing the industry is estimated to produce the elasticity to measure the potential effect of inter-industry coordination. The results suggest that only the primary industry attains market power, and the market power can exert even without collusion between the primary and secondary industries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Measuring Market Power in the U.S. Aluminum Industry: A Residual Demand Approach

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1011820525065
Publisher site
See Article on Publisher Site

Abstract

This paper applies a refined market power test to examine market power in the U.S. aluminum industry. The study conducts a two-step analysis in which the inverse residual demand facing the industry is first estimated to generate the associate elasticity to infer market power, and then the inverse partial residual demand facing the industry is estimated to produce the elasticity to measure the potential effect of inter-industry coordination. The results suggest that only the primary industry attains market power, and the market power can exert even without collusion between the primary and secondary industries.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 3, 2004

References

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