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A Comparison of Oligopoly Welfare Loss Estimates for U.S. Food Manufacturing
Author(s) -
Peterson Everett B.,
Connor John M.
Publication year - 1995
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1243540
Subject(s) - oligopoly , allocative efficiency , imperfect competition , market power , economics , deadweight loss , microeconomics , welfare , market structure , econometrics , imperfect , competition (biology) , industrial organization , cournot competition , monopoly , market economy , ecology , linguistics , philosophy , biology
Capitalizing on theoretical advances in calculating deadweight welfare losses due to imperfect competition, we compare eight empirical estimates for the U.S. food manufacturing industries. The estimates incorporate varying theoretical assumptions about demand, supply, and firm pricing behavior; and utilize various data sources, time periods, and assumptions about the proper competitive benchmark. While the estimates of average allocative losses range widely, there is a high degree of congruence in the rankings of economic losses due to market power. Thus, from the perspective of efficient antitrust enforcement, the newer theoretical oligopoly approaches and the traditional structure‐conduct‐performance models would target similar industries.