Abstract
Using independently derived estimates for the market demand elasticity and firm marginal cost, this paper measures the conjectural variations (cv's) of the eight largest U.S. steel firms for the years 1920 to 1972. Comparisons are then made between the measured cv's and those predicted by certain industry conduct hypotheses. Specifically the hypotheses are those for competitive behavior, Cournot behavior, imperfect collusion, and industry profit maximization (perfect collusion). One of the two extreme theories of firm behavior, industry profit maximization, is rejected, but the acceptance or rejection of the other theories depends on the assumptions made about the cost structure of the sample firms.
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Rogers, R.P. The measurement of conjectural variations in an oligopoly industry. Rev Ind Organ 4, 39–65 (1989). https://doi.org/10.1007/BF02284661
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DOI: https://doi.org/10.1007/BF02284661