Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Industrial Organization
Testing Oligopolistic And Oligopsonistic Behaviour: An Application To The U.S. Meat-Packing Industry, Azzeddine Azzam, Emilio Pagoulatos
Testing Oligopolistic And Oligopsonistic Behaviour: An Application To The U.S. Meat-Packing Industry, Azzeddine Azzam, Emilio Pagoulatos
Azzeddine Azzam
This paper extends the conjectural approach in industrial organization to the analysis of imperfections in output and factor markets. Starting from the specification of a production function, the econometric analysis is based on the formulation and estimation of a simultaneous-equation model consisting of production function, first-order conditions associated with factor employment, and two conjectural elasticities to parameterize the industry's oligopoly and oligopsony equilibria. As an example, we provide and application to the U.S. meat-packing industry. Our results suggest that the industry exercises market power in both the output (meat) market and the factor (live animal) market.