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Market Power and/or Efficiency: A Structural Approach

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Abstract

This article separates oligopoly-power and cost-efficiency effects ofchanges in industrial concentration and assesses their impact on output prices in 32 food-processing industries. Empirical results indicate that although concentration inducescost efficiency in one-third of the industries, oligopoly-power effects either dominate cost efficiencyor reinforce inefficiency, resulting in higher output prices in most industries. The articlealso provides fresh econometric estimates of oligopoly power and economies of size for the industriesin question.

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Authors and Affiliations

  1. Department of Agricultural and Resource Economics, University of Connecticut, Storrs, CT, 06269-4021, U.S.A.

    Rigoberto A. Lopez, Azzeddine M. Azzam & Carmen Lirón-España

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  1. Rigoberto A. Lopez
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  2. Azzeddine M. Azzam
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  3. Carmen Lirón-España
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Lopez, R.A., Azzam, A.M. & Lirón-España, C. Market Power and/or Efficiency: A Structural Approach. Review of Industrial Organization 20, 115–126 (2002). https://doi.org/10.1023/A:1013867114881

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