ESTIMATING MARKET POWER AND PRICING CONDUCT IN A PRODUCT-DIFFERENTIATED OLIGOPOLY: THE CASE OF THE DOMESTIC SPAGHETTI SAUCE INDUSTRY

This paper develops a simultaneous-equations panel data econometric model to obtain point estimates of market power and pricing conduct in a representative product-differentiated, oligopolistic food market. The importance of this class of markets is recognized given its prevalence in the food and fiber system, especially for final consumer food products. The $1.3 billion domestic spaghetti sauce industry is featured. Although the results indicate firms exert limited market power, a portion of this power is derived from tacit price collusion. A higher degree of price collusion was found among brands within a market segment than between segments.


Subject(s):
Issue Date:
1999-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/15137
Published in:
Journal of Agricultural and Applied Economics, Volume 31, Number 1
Page range:
1-13
Total Pages:
13




 Record created 2017-04-01, last modified 2017-08-23

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