We show standard methods to estimate production functions do not identify markups.This nonidentification creates spurious skewness in estimated markup distributions.We also show that ex-ante structure on the returns to scale solves the identificationproblem. In US public firm data and in a Monte...

We study an infinitely-repeated game of oligopolistic price leadership in which one firm, the leader, proposes a supermarkup over Bertrand prices to a coalition of rivals. We estimate the model with aggregate scanner data on the beer industry and find the supermarkup accounts for 6% of price....

In this essay, I measure markup behaviors at the firm level (as opposed to the aggregate level usually measured in the literature). I use firm-level data in manufacturing sectors of France from the Bureau van Dijk (BvD) Amadeus dataset. I focus on the manufacturing sector because it suits the...

We study the welfare costs of markups in a dynamic model with heterogeneous firms and endogenously variable markups. We find that the welfare costs of markups are large. We decompose the costs of markups into three channels: (i) an aggregate markup that acts like a uniform output tax, (ii)...

We develop a general equilibrium model of monopolistic competition with a traded and a non-traded sector. Using a broad class of homothetic preferences—that generate variable markups, display a simple behavior of their elasticity of substitution, and nest the ces as a limiting case—we show...

This paper analyses the impact of financial frictions on markup adjustments at the firm level. We use a rich panel data set that matches information on banking relationships with firm-level data. By relying on insights from recent contributions in the literature, we obtain exogenous credit...