Differential efficiency, market structure and price

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

A persistent question in industrial economics is the underpinning of the link between market concentration and price. How much of the link can be attributed to market power and how much to market efficiency? This paper develops a theoretical model to address that question. Applied to the US portland cement industry, the model indicates that both impacts matter. In relative terms, however, the market power effect is twice as large as the efficiency effect. An implication for merger policy is that the beneficial efficiency effects of mergers may not be obtained without the detrimental market power effects as well.

Original languageEnglish (US)
Pages (from-to)1351-1357
Number of pages7
JournalApplied Economics
Volume33
Issue number10
DOIs
StatePublished - Jul 26 2001

Fingerprint

Market price
Market structure
Market power
Mergers
Market efficiency
Market concentration
Merger policy
Cement industry
Industrial economics

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Differential efficiency, market structure and price. / Azzam, A.; Rosenbaum, David I.

In: Applied Economics, Vol. 33, No. 10, 26.07.2001, p. 1351-1357.

Research output: Contribution to journalArticle

@article{5b2c66eac66e4ac09c31d7beb667187a,
title = "Differential efficiency, market structure and price",
abstract = "A persistent question in industrial economics is the underpinning of the link between market concentration and price. How much of the link can be attributed to market power and how much to market efficiency? This paper develops a theoretical model to address that question. Applied to the US portland cement industry, the model indicates that both impacts matter. In relative terms, however, the market power effect is twice as large as the efficiency effect. An implication for merger policy is that the beneficial efficiency effects of mergers may not be obtained without the detrimental market power effects as well.",
author = "A. Azzam and Rosenbaum, {David I}",
year = "2001",
month = "7",
day = "26",
doi = "10.1080/00036840010006615",
language = "English (US)",
volume = "33",
pages = "1351--1357",
journal = "Applied Economics",
issn = "0003-6846",
publisher = "Routledge",
number = "10",

}

TY - JOUR

T1 - Differential efficiency, market structure and price

AU - Azzam, A.

AU - Rosenbaum, David I

PY - 2001/7/26

Y1 - 2001/7/26

N2 - A persistent question in industrial economics is the underpinning of the link between market concentration and price. How much of the link can be attributed to market power and how much to market efficiency? This paper develops a theoretical model to address that question. Applied to the US portland cement industry, the model indicates that both impacts matter. In relative terms, however, the market power effect is twice as large as the efficiency effect. An implication for merger policy is that the beneficial efficiency effects of mergers may not be obtained without the detrimental market power effects as well.

AB - A persistent question in industrial economics is the underpinning of the link between market concentration and price. How much of the link can be attributed to market power and how much to market efficiency? This paper develops a theoretical model to address that question. Applied to the US portland cement industry, the model indicates that both impacts matter. In relative terms, however, the market power effect is twice as large as the efficiency effect. An implication for merger policy is that the beneficial efficiency effects of mergers may not be obtained without the detrimental market power effects as well.

UR - http://www.scopus.com/inward/record.url?scp=0034938285&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0034938285&partnerID=8YFLogxK

U2 - 10.1080/00036840010006615

DO - 10.1080/00036840010006615

M3 - Article

AN - SCOPUS:0034938285

VL - 33

SP - 1351

EP - 1357

JO - Applied Economics

JF - Applied Economics

SN - 0003-6846

IS - 10

ER -