Market Power and/or Efficiency: An Application to U.S. Food Processing

This article separates oligopoly-power and cost-efficiency effects of changes in industrial concentration and assesses their impact on output prices in 32 food-processing industries. Empirical results indicate that although concentration induces cost efficiency in one-third of the industries, oligopoly-power effects either dominate cost efficiency or reinforce inefficiency, resulting in higher output prices in most industries. The article also provides fresh econometric estimates of oligopoly power and economies of size for the industries in question.


Issue Date:
2001
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/25160
Total Pages:
14
JEL Codes:
L00; L11; L13; L66
Series Statement:
Research Report No. 60




 Record created 2017-04-01, last modified 2017-08-24

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