Estimation of Market Power in a Nonrenewable Resource Industry
In nonrenewable resource industries, the existence of a markup of price over marginal market cost may reflect the existence of an implicit user cost for the resource rather than market power. We show that valid estimates of market power can be obtained by the joint estimation of a restricted cost function and an inverse supply relation. Estimation of the model with data for the largest firm in the international nickel industry indicates that output price substantially exceeded marginal market cost, with most of the difference due to the exercise of market power rather than the user cost of the resource.
Year of publication: |
2002
|
---|---|
Authors: | Ellis, Gregory M. ; Halvorsen, Robert |
Published in: |
Journal of Political Economy. - University of Chicago Press. - Vol. 110.2002, 4, p. 883-899
|
Publisher: |
University of Chicago Press |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Estimation of market power in an nonrenewable resource industry
Ellis, Gregory M., (2002)
-
Estimation of Market Power in a Nonrenewable Resource Industry
Ellis, Gregory M., (2002)
-
Estimation of Market Power in a Nonrewable Resource Industry
Ellis, Gregory M., (2002)
- More ...