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Tuesday, May 5, 2020 | History

2 edition of Price-cost margins and market concentration found in the catalog.

Price-cost margins and market concentration

Clarke, Roger

Price-cost margins and market concentration

1970-76

by Clarke, Roger

  • 93 Want to read
  • 35 Currently reading

Published by University of Sheffield, Division of Economic Studies in Sheffield .
Written in English


Edition Notes

StatementRoger Clarke.
SeriesDiscussion paper / University of Sheffield. Division of Economic Studies -- no.80.12, Discussion paper (University of Sheffield. Division of Economic Studies) -- no.80.12.
The Physical Object
Pagination32p.
Number of Pages32
ID Numbers
Open LibraryOL13950129M

in this literature looked at the empirical relationship between a measure of market power and a measure of market structure or market concentration. In these studies, the typical measure of market power was the Lerner Index (LI) which is de–ned as price minus marginal cost divided by price, LI (P MC)=P. And a common measure of market File Size: 5MB. INDU STRIAL CONCENTRATION, PRICE-COST MARGINS, AND INNOVATION 1. Introduction This p aper esti mates th e annual average rate of Hicks neutral te chnical change in 7 4 Jap anese manufa cturing industries, , and relate s these estimates to industrial conc entra tion .

“ Business Cycles and the Relationship Between Concentration and Price-Cost Margins.” The Rand Journal of Economics – Domowitz, Ian, Hubbard, Glenn R., and Petersen, Bruce : Jeffrey M. Perloff, Larry S. Karp, Amos Golan. Of particular importance is the possibility that conglomerate mergers may increase aggregate concentration and eventually create a 'zaibatsu' economy. This book, first published in , addresses the issue by examining the mutual forbearance hypothesis. More specifically, do multi-market contacts among diversified firms affect market competition?

These price-cost margins average percent over all industries and years. A companion paper to this one (Flath, ), explores the temporal relation between these price-cost margins and the annual time series of Herfindahl index of concentration in each industry. Under the simple homogenous product Cournot model, industry price-cost margin Cited by: “Price-Cost Margins in Producer Goods Industries and ‘The Importance of Being Unimportant,'” Review of Economics and Statistics, August “Organizational Costs, ‘Sticky Equilibria,’ and Critical Levels of Concentration,” Review of Economics and Statistics, February, (with A. Mead Over, Jr.).


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Price-cost margins and market concentration by Clarke, Roger Download PDF EPUB FB2

But when he adds firm market share divided by concentration to this specification--given that four-firm concentration equals % in 14 of the 18 markets in the study, and has a minimum value of 80%, this variable is close to being just market share--the coefficient of concentration declines by nearly one-half and its t-ratio declines to concentration and price-cost margins over time."5 It is motivated by previous results that the strength of the relationship declined from to From tohowever, the File Size: KB.

to equilibrium price-cost margins in times of recession (see Cubbin, ). Of the variables mentioned above, barriers to entry and countervailing power affect the basic model by moving the actual market power in an industry away from that given by the concentration measure.

Cyclical effects work most directly on the industry price elasticity. measure calculated from output values, this study uses a measure of concentration based upon annual productive capacity, which significantly reduces measurement errors and endogeneity concerns.

Results from the analysis indicate that one percent increase in market concentration increases price-cost margins by to percentage points. TheFile Size: KB. The Determinants of Price-Cost Margins The literature contains a large number of statistical studies in which profit rates or price-cost margins are explained by concentration, adver-tising, and certain other variables (see Weiss ).

Our margin variable will be the widely used "price-cost margin" based on census totals. It can. PCM - Price-Cost Margin. Looking for abbreviations of PCM. It is Price-Cost Margin. Price-Cost Margin listed as PCM There was a positive relationship between market concentration and price-cost margin in the The new funds necessary to provide universal service to be collected from LD service subscribers called for increasing price-cost.

The results point to the positive effect of the market concentration on the price-cost margin in the Czech food and beverages industry over the period of yearswhich is in accordance. PRICE-COST MARGIN: The difference between price (p) and marginal cost (mc) as a fraction of price, that is [p-mc]/ price-cost margin is usually taken as an indicator of market power because the larger the margin, the larger the difference between price and marginal cost, that is, the larger the distance between the price and the competitive price.

paper, “Price-cost margins and market structure” () which remains clearly the most-cited piece either of us have. The model was one of the early elements to provide a rigorous theoretical underpinning for the cross- sectional structure- performance work so popular in industrial economics at that stage.

Unionism, Price-Cost Margins, and the Return to Capital. there are well—known problems with concentration as a measure of market. The IRS corporate source book provides concordances. In this post, which is based on my FTC testimony, I explain why growing market power provides a better explanation for higher price-cost margins and rising concentration in many industries, declining economic dynamism, and other contemporary US trends, than the most plausible benign alternative: increased scale economies and temporary returns.

Downloadable. The paper investigates the relationship between the market concentration and the price-cost margin in the Czech food processing industry during Estimated econometric models with Fixed Effects supported hypothesis assuming the positive impact of the market concentration on the price-cost margin controlling for by: 1.

Abstract. As a result of well-documented problems of interpretation associated with studies that seek to identify the relationship between market concentration and firm profits, a growing body of literature has focussed instead on the relationship between market concentration and observed by: Concentration and price-cost margins in manufacturing industries (Publications of the Institute of Business and Economic Research, University of California) [Collins, Norman R] on *FREE* shipping on qualifying offers.

Concentration and price-cost margins in manufacturing industries (Publications of the Institute of Business and Economic ResearchAuthor: Norman R Collins.

Summary. This paper examines the relationship between price-cost margins, foreign trade, domestic market structure, and the business cycle for a panel of 43 Author: Martha K.

Field, Emilio Pagoulatos. Firm Diversification, Mutual Forbearance Behavior and Price-Cost Margins. DOI link for Firm Diversification, Mutual Forbearance Behavior and Price-Cost Margins. Firm Diversification, Mutual Forbearance Behavior and Price-Cost Margins bookCited by: 4.

It made two things clear, that the appropriate margin was a margin on revenue, not capital, and that an arguably appropriate measure of industry concentration was the Herfindahl.

This latter finding led to a great deal of policy-driven work (for example Dansby and Willig, ; Farrell and Shapiro, ) and thus may have been one of the Author: Michael Waterson.

This paper examines the determinants of prices and price-cost margins for an international sample of mobile voice operators in 45 countries over the period. In markets for mobile voice services, it is likely that firms with large market share have substantial. His first paper entitled Price-cost margins and market structure, written with Keith Cowling examined links between changes in concentration and changes in margins.

Inhe co-wrote the paper The profitability-concentration relation: market power or efficiency?, published in.

However, in, andSirius XM reported profit margins of – percent, percent, and percent. 33 The U.S. Postal Service has a statutory monopoly over mail delivery, yet it incurred net losses in, andwith profit margins of – percent, – percent, and – percent, respectively.

34 The U.S Cited by: 3. 1. Introduction 2. Multi-Market Contacts, Firm Interdependence and Industrial Profitability Appendix A. A Simple Model of Firm Interdependence 3.

The Sample Appendix B. Sample Firms 4. Horizontal Interdependence and Industry Price-Cost Margins Appendix C. Data Sources 5. Vertical Interdependence and Industry Price-Cost Margins 6. Similar to Domowitz, Hubbard, and Petersen (a, b, ) and Schmalensee (), who have studied the intra-industry relation between industry-level price-cost margins and concentration levels over the –81 period, we do not find a strong relation between ROA and measures of concentration during the earlier part of our sample.

In Cited by: Lecture Notes on Pricing (Revised: July ) price-cost margin is inversely related to the firm’s price elasticity of demand. (If you have market share, should it lower its price aggressively to try to capture more market share from the leading firm, or maintain a File Size: 1MB.