Price Competition and Market Structure: The Impact of Cartel Policy on Concentration in the UK | Zendy

Symeonidis George | Zendy

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Price Competition and Market Structure: The Impact of Cartel Policy on Concentration in the UK

Author(s) -

Symeonidis George

Publication year - 2000

Publication title -

the journal of industrial economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.93

H-Index - 77

eISSN - 1467-6451

pISSN - 0022-1821

DOI - 10.1111/1467-6451.00110

Subject(s) - sunk costs , cartel , market structure , competition (biology) , economics , panel data , monopolistic competition , industrial organization , market concentration , imperfect competition , microeconomics , oligopoly , collusion , econometrics , cournot competition , ecology , monopoly , biology

This paper examines the impact of firms’ conduct on market structure. It studies the evolution of concentration in UK manufacturing following the abolition of cartels using a theoretical framework based on Sutton’s theory of market structure and a panel data set of four‐digit industries over 1958–1977. The econometric results suggest that the intensity of price competition has a positive effect on concentration in exogenous sunk cost industries as well as in advertising‐intensive and R&D‐intensive industries. The concentration‐market size relationship, while negative in exogenous sunk cost industries, breaks down in industries with high advertising or R&D intensity.

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