Open AccessOligopoly Power, Cross-Market Effects and Demand Relatedness: An Empirical Analysis
Author(s) -
Bouras V. David,
Wesseh J. Wollo
Publication year - 2020
Publication title -
european journal of economics and business studies
Language(s) - English
Resource type - Journals
eISSN - 2411-9571
pISSN - 2411-4073
DOI - 10.26417/800xjj79f
Subject(s) - catfish , oligopoly , market power , inverse demand function , microeconomics , economics , distortion (music) , industrial organization , business , cournot competition , monopoly , fishery , demand curve , fish <actinopterygii> , biology , cmos , electronic engineering , engineering , amplifier
The goal of the paper is to develop a conceptual framework that can be used to examine market competitiveness and assess cross-market effects in a multi-product oligopoly consisting of firms producing and selling various demand-related products. The econometric model which consists of two inverse demand functions and two price-margin equations is applied to the US catfish processing industry. Focusing on fresh catfish filet and whole fresh catfish, the empirical results rule out the existence of cross-market effects, but give support to the existence of some degree of market power. In that setting, the oligopoly power indices are, respectively, 18.2 percent and 13.3 percent for fresh catfish filet and whole fresh catfish thereby indicating that the price distortion is more pronounced in the market for fresh catfish filet than it is in the market for whole fresh catfish.