Market Structure and Price-Cost Margins

Dados Bibliográficos

ID9726446
AutoresRoger Clarke (0000-0001-6266-1793), Stephen W Davies
Ano1982
Volume49
Fascículo195
Páginas277
Data de publicação1982-08-01
Open AccessNão
TipoARTICLE
PeriódicoEconomica (JOURNAL)
Identificadores do periódicoISSN: 0013-0427 • E-ISSN: 1468-0335
EditoraJSTOR (PUBLISHER)
DOI10.2307/2553628
OpenAlexW1988985120
IdiomaEN
Citações recebidas10
Referências citadas2

In a paper that has become a standard reference in the structure-conductperformance approach to industrial economics, Cowling and Waterson (1976) developed a theoretical rationale for expecting industry profitability to be positively correlated with the level of concentration. Their model, based on a simple algebraic description of oligopoly behaviour, has been interpreted as providing a justification for the common empirical practice of cross-industry regression analysis of price-cost margins in terms of concentration levels. In the present paper we show that, on further examination, this model implies a joint determination of margins and concentration. This provides some interesting comparative static results of relevance to inter-industry differences in concentration levels. Equally, however, it leads to various (cautionary) insights concerning the meaning of price-cost margin versus concentration regressions

Cost structure · Economics · Industrial organization · Market structure · Microeconomics · Economic theories and models · Global trade and economics · Merger and Competition Analysis