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Abstract

Several studies have estimated the welfare effects of recent changes in the European Union's common policy on banana imports, based upon the assumption that the market is perfectly competitive. However, if the market is imperfectly competitive, predictions about changes in banana policy may be inaccurate. The objective of this paper is to estimate the degree of market imperfection in the German market for banana imports using dynamic methods. The hypothesis that this market is perfectly competitive is rejected, and, in addition, the degree of market imperfection is estimated to be higher using a dynamic model compared to previous static estimates.

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