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.


Subject(s):
Issue Date:
2001
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/11757
Total Pages:
26
Series Statement:
Staff Paper 2001-53




 Record created 2017-04-01, last modified 2017-04-04

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)