Estimating the Conjectural Variation and Market Power in Selected Industries

Mohammad Nabi Shahiki Tash; Hamid Hodjaty

doi:doi:10.11648/j.eco.20130201.11

| Peer-Reviewed

Estimating the Conjectural Variation and Market Power in Selected Industries

Mohammad Nabi Shahiki Tash, Hamid Hodjaty

Published in Economics (Volume 2, Issue 1)

Received: 9 May 2013 Published: 30 May 2013

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

In recent studies, many economists have focused on the industry and market. In order to provide a comprehensive framework for target market, Policymakers need to have information about the structure of the market and the factors affecting it. The model which is presented in this research shows the behavior of selected industries. This model investigates the structure from competition to monopoly and makes a link between the consumer and the producer behavior. In this paper ten manufacturing industries in Iran at 4-degree ISIC are chosen and market power and conjectural elasticity (CV) is examined using panel data from 1996 to 2007.The results show that the estimated CV differs significantly from -1 for most of the industries surveyed but two cases, cement and beverage industries with -0.27 and 0.5 respectively. On a scale of -1(no collusion) to ((1⁄H)-1) (full collusion), these industries seem to have competitive behavior. Further, the effects of concentration on both market power and cost efficiency on price is estimated

Published in	Economics (Volume 2, Issue 1)
DOI	10.11648/j.eco.20130201.11
Page(s)	1-6
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Conjectural Variation Elasticity, Market Power, Selected Industries

References

[1]	Appelbaum, E., 1982. "The estimation of the degree of oligopoly power", Journal of Econometrics, (9): 287–99
[2]	Azzeddine M. Azzam and John R. Schroeter, 1995, "The tradeoff between oligopsony power and cost efficiency in horizontal consolidation: An Example from Beef Packing", American Journal of Agricultural Economics, Vol. 77, No. 4, pp. 825-836
[3]	Azzeddine M. Azzam, 1997. "measuring market power and cost-efficiency effects of industrial concentration", Journal of Industrial Economics 45(4): 377-86.
[4]	Azzeddine Azzam and David Rosenbaum, 2001, "differential efficiency, market structure, and price applied economics 33, pp. 1351–1357
[5]	A. M. Azzam & E. Pagoulatos, 1990. "Testing Oligopolistic And Oligopsonistic Behaviour: An Application To The Us Meat-Packing Industry,"Journal of Agricultural Economics, Wiley Blackwell, vol. 41(3), pages 362-370.
[6]	Bain, J.S., 1951. "Relation of profit rate to concentration: American manufacturing, 1936–1940", Quarterly Journal of Economics 65, 293–324.
[7]	Berger, A., T. Hannan, 1998, "The efficiency cost of market pow er in the banking in dustry: a test of the "Quiet Life" and related hypotheses", Review of Economics and Statistics 27(2), 404-431.
[8]	Bresnahan, T. F., 1982, "The oligopoly solution is identified", Economic letters, 10, 87–92.
[9]	Bresnahan, T. F., 1989. "Empirical studies of industries with market power", In R.
[10]	chmalensee & R.Willig (Eds.), Handbook of industrial organization. Amsterdam: North-Holland.
[11]	Demsetz, H, 1973, "Industry structure, market rivalry, and public policy", Journal of Law and Economics, 16, 1–10
[12]	Gorman, W.M, 1953, "Community preference fields", Econometrica 21, pages 63-80.
[13]	Jorge Fernandez-Cornejo and David Spielman, 2002, "concentration, market power, and cost efficiency in the corn seed industry", annual meeting of the American agricultural economics association, Long Beach, CA, 28-31
[14]	Lever, Marcel H.C., Henry R. Nieuwenhuijsen and Adriaan J. van Stel, 1999, "The degree of collusion in construction", EIM Research Report 9810.
[15]	Rigoberto A. Lopez, Azzedine M. Azzam, Carmen Lirón-España, 2001, "Market Power and/or Efficiency: An Application to U.S. Food Processing", Food Marketing Policy Center Research Report No. 60 July
[16]	Shepherd, W., 1982, "Economies of scale and monopoly profits", Industrial Organization, Antitrust, and Public Policy, J.V. Craven (ed.), Boston, Kulwer Nihoff.
[17]	Shepherd, W., 1986, "Tobin´s q and the structure- performance relationship: reply", American Economic Review 76, 1205-10

Cite This Article

Plain Text BibTeX RIS

APA Style

Mohammad Nabi Shahiki Tash, Hamid Hodjaty. (2013). Estimating the Conjectural Variation and Market Power in Selected Industries. Economics, 2(1), 1-6. https://doi.org/10.11648/j.eco.20130201.11

Copy | Download

ACS Style

Mohammad Nabi Shahiki Tash; Hamid Hodjaty. Estimating the Conjectural Variation and Market Power in Selected Industries. Economics. 2013, 2(1), 1-6. doi: 10.11648/j.eco.20130201.11

Copy | Download

AMA Style

Mohammad Nabi Shahiki Tash, Hamid Hodjaty. Estimating the Conjectural Variation and Market Power in Selected Industries. Economics. 2013;2(1):1-6. doi: 10.11648/j.eco.20130201.11

Copy | Download

@article{10.11648/j.eco.20130201.11,
  author = {Mohammad Nabi Shahiki Tash and Hamid Hodjaty},
  title = {Estimating the Conjectural Variation and Market Power in Selected Industries},
  journal = {Economics},
  volume = {2},
  number = {1},
  pages = {1-6},
  doi = {10.11648/j.eco.20130201.11},
  url = {https://doi.org/10.11648/j.eco.20130201.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20130201.11},
  abstract = {In recent studies, many economists have focused on the industry and market. In order to provide a comprehensive framework for target market, Policymakers need to have information about the structure of the market and the factors affecting it. The model which is presented in this research shows the behavior of selected industries. This model investigates the structure from competition to monopoly and makes a link between the consumer and the producer behavior. In this paper ten manufacturing industries in Iran at 4-degree ISIC are chosen and market power and conjectural elasticity (CV) is examined using panel data from 1996 to 2007.The results show that the estimated CV differs significantly from -1 for most of the industries surveyed but two cases, cement and beverage industries with -0.27 and 0.5 respectively. On a scale of -1(no collusion) to ((1⁄H)-1) (full collusion), these industries seem to have competitive behavior. Further, the effects of concentration on both market power and cost efficiency on price is estimated},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Estimating the Conjectural Variation and Market Power in Selected Industries
AU  - Mohammad Nabi Shahiki Tash
AU  - Hamid Hodjaty
Y1  - 2013/05/30
PY  - 2013
N1  - https://doi.org/10.11648/j.eco.20130201.11
DO  - 10.11648/j.eco.20130201.11
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 1
EP  - 6
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20130201.11
AB  - In recent studies, many economists have focused on the industry and market. In order to provide a comprehensive framework for target market, Policymakers need to have information about the structure of the market and the factors affecting it. The model which is presented in this research shows the behavior of selected industries. This model investigates the structure from competition to monopoly and makes a link between the consumer and the producer behavior. In this paper ten manufacturing industries in Iran at 4-degree ISIC are chosen and market power and conjectural elasticity (CV) is examined using panel data from 1996 to 2007.The results show that the estimated CV differs significantly from -1 for most of the industries surveyed but two cases, cement and beverage industries with -0.27 and 0.5 respectively. On a scale of -1(no collusion) to ((1⁄H)-1) (full collusion), these industries seem to have competitive behavior. Further, the effects of concentration on both market power and cost efficiency on price is estimated
VL  - 2
IS  - 1
ER  -

Copy | Download

Author Information

Mohammad Nabi Shahiki Tash

Dept. Assistant professor of economics
Hamid Hodjaty

Dept. Of Economics, Sistan and Baluchestan, Iran

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Mohammad Nabi Shahiki Tash, Hamid Hodjaty. (2013). Estimating the Conjectural Variation and Market Power in Selected Industries. Economics, 2(1), 1-6. https://doi.org/10.11648/j.eco.20130201.11

Copy | Download

ACS Style

Mohammad Nabi Shahiki Tash; Hamid Hodjaty. Estimating the Conjectural Variation and Market Power in Selected Industries. Economics. 2013, 2(1), 1-6. doi: 10.11648/j.eco.20130201.11

Copy | Download

AMA Style

Mohammad Nabi Shahiki Tash, Hamid Hodjaty. Estimating the Conjectural Variation and Market Power in Selected Industries. Economics. 2013;2(1):1-6. doi: 10.11648/j.eco.20130201.11

Copy | Download

@article{10.11648/j.eco.20130201.11,
  author = {Mohammad Nabi Shahiki Tash and Hamid Hodjaty},
  title = {Estimating the Conjectural Variation and Market Power in Selected Industries},
  journal = {Economics},
  volume = {2},
  number = {1},
  pages = {1-6},
  doi = {10.11648/j.eco.20130201.11},
  url = {https://doi.org/10.11648/j.eco.20130201.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20130201.11},
  abstract = {In recent studies, many economists have focused on the industry and market. In order to provide a comprehensive framework for target market, Policymakers need to have information about the structure of the market and the factors affecting it. The model which is presented in this research shows the behavior of selected industries. This model investigates the structure from competition to monopoly and makes a link between the consumer and the producer behavior. In this paper ten manufacturing industries in Iran at 4-degree ISIC are chosen and market power and conjectural elasticity (CV) is examined using panel data from 1996 to 2007.The results show that the estimated CV differs significantly from -1 for most of the industries surveyed but two cases, cement and beverage industries with -0.27 and 0.5 respectively. On a scale of -1(no collusion) to ((1⁄H)-1) (full collusion), these industries seem to have competitive behavior. Further, the effects of concentration on both market power and cost efficiency on price is estimated},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Estimating the Conjectural Variation and Market Power in Selected Industries
AU  - Mohammad Nabi Shahiki Tash
AU  - Hamid Hodjaty
Y1  - 2013/05/30
PY  - 2013
N1  - https://doi.org/10.11648/j.eco.20130201.11
DO  - 10.11648/j.eco.20130201.11
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 1
EP  - 6
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20130201.11
AB  - In recent studies, many economists have focused on the industry and market. In order to provide a comprehensive framework for target market, Policymakers need to have information about the structure of the market and the factors affecting it. The model which is presented in this research shows the behavior of selected industries. This model investigates the structure from competition to monopoly and makes a link between the consumer and the producer behavior. In this paper ten manufacturing industries in Iran at 4-degree ISIC are chosen and market power and conjectural elasticity (CV) is examined using panel data from 1996 to 2007.The results show that the estimated CV differs significantly from -1 for most of the industries surveyed but two cases, cement and beverage industries with -0.27 and 0.5 respectively. On a scale of -1(no collusion) to ((1⁄H)-1) (full collusion), these industries seem to have competitive behavior. Further, the effects of concentration on both market power and cost efficiency on price is estimated
VL  - 2
IS  - 1
ER  -

Copy | Download