Bikker, Jacob A.; Shaffer, Sherrill; Spierdijk, Laura - In: The Review of Economics and Statistics 94 (2012) 4, pp. 1025-1044
The Panzar-Rosse test has been widely applied to assess competitive conduct, often in specifications controlling for firm scale or using a price equation. We show that neither a price equation nor a scaled revenue function yields a valid measure for competitive conduct. Moreover, even an...