A Structural Model of the Analysis of Retail Market Power: The Case of Fluid Milk

2012 ◽  
Vol 94 (1) ◽  
pp. 67-79 ◽  
Author(s):  
Vardges Hovhannisyan ◽  
Brian W. Gould
Keyword(s):  
Market Power ◽  
Structural Model ◽  
Retail Market ◽  
Fluid Milk

scholarly journals A Structural Model of the Retail Market for Illicit Drugs

2017 ◽  
Vol 107 (3) ◽  
pp. 858-896 ◽  
Author(s):  
Manolis Galenianos ◽  
Alessandro Gavazza
Keyword(s):  
Illicit Drugs ◽  
Structural Model ◽  
Crack Cocaine ◽  
Retail Market ◽  
High Quality ◽  
Using Data ◽  
First Time ◽  
Relative Profitability

We estimate a model of illicit drugs markets using data on purchases of crack cocaine. Buyers are searching for high-quality drugs, but they determine drugs' quality (i.e., their purity) only after consuming them. Hence, sellers can rip off first-time buyers or can offer higher-quality drugs to induce buyers to purchase from them again. In equilibrium, a distribution of qualities persists. The estimated model implies that if drugs were legalized, in which case purity could be regulated and hence observable, the average purity of drugs would increase by approximately 20 percent and the dispersion would decrease by approximately 80 percent. Moreover, increasing penalties may raise the purity and affordability of the drugs traded by increasing sellers' relative profitability of targeting loyal buyers versus first-time buyers. (JEL D12, K42, L15, L65)

scholarly journals The impact of global trends on Czech trade in agrarian and foodstuff products

2011 ◽  
Vol 59 (4) ◽  
pp. 287-294
Author(s):  
Eva Rosochatecká ◽  
Luboš Smutka
Keyword(s):  
Market Power ◽  
Main Idea ◽  
Pilot Project ◽  
Multinational Companies ◽  
Market Force ◽  
Market Process ◽  
Retail Market ◽  
Global Trends ◽  
Retail Chains ◽  
The Impact

The Czech retail market has changed its structure and form during the last twenty years. The influence of two factors is especially significant. The first one is the growth of internationalization and the second one is market concentration growth. The significant opening process of the Czech economy, accompanied by the liberalization of the Czech market process, enabled the international retail companies to penetrate the national retail market. The most powerful European retail companies are now present in the Czech market. The available shopping area/cap is also one of the largest in Europe. Retail chains have taken a dominant position in the market, and because of their market power they are able to determine trade/contract conditions for domestic suppliers. Retail chains’ sales have been constantly growing. While in 2006 the value of sales was about 258.5 billion CZK, in 2008 it was about 312.2 billion CZK. The impact of the economic crisis on the Czech retail market has not been as stressful as it was abroad. In 2009, a slowdown of the Czech retail market was recorded, but the value of sales decreased by only 3 billion CZK (in comparison with 2008). The highest sales (59 billion CZK) were recorded by the Lidl & Schwarz-Gruppe, which is the owner of two dominant retail chains in the Czech retail market (Kaufland and Lidl). The main aim of the paper is to evaluate the selected aspects, which have been influencing the relationship between multinational companies (retail companies – supermarkets and hypermarkets) and local (Czech) suppliers of agrarian and foodstuff products (farmers and foodstuff companies). The paper analyses the problem of abuse of multinational companies’ significant market power in relation to their suppliers. Based on a pilot project, the efficiency of market force law, and its use in practice, are analysed. The main idea is to analyse the following problems: the impact of 30 days payment period for goods delivered, under cost prices required by retail companies, and the structure of fees and charges required by retail companies.

scholarly journals Rebalancing the Market Power. Manufacturer and Retailer Brands in the German Food Retail Market

2015 ◽  
Vol 48 (1) ◽  
pp. 21-44
Author(s):  
Andreas Bielig
Keyword(s):  
Market Power ◽  
Price Competition ◽  
Retail Market ◽  
Food Retail ◽  
Political Implications ◽  
Total Food ◽  
Market Coverage ◽  
German Food ◽  
The Empirical Analysis ◽  
Financial Losses

Abstract The German food retail market is considered to be one of the most competitive markets worldwide. A narrow oligopoly of domestic retail chains dominates competition at the national and regional levels, driven mostly by price competition and extensive market coverage. As a result, market entrance for potential newcomers is highly restricted, even for such global players like Wal-Mart, which retreated in 2006 after nine years of substantial financial losses in Germany. There have been discernable attempts by the domestic incumbents to rebalance the traditional “task division”, affecting the range of customers choices as well as retail brands. However, within ten years the share of large retailers brands earnings in the total food retail market increased from 21.8 percent to 38.8 percent in 2012, as “house brands” optimized their assortment, increased their independence from main suppliers and squeezed out competitors. The empirical analysis presented below describes the role played by different retail brands in German food retail market as measured by their market power, and considers its political implications.

scholarly journals Asymmetric Information and Imperfect Competition in Lending Markets

2018 ◽  
Vol 108 (7) ◽  
pp. 1659-1701 ◽  
Author(s):  
Gregory S. Crawford ◽  
Nicola Pavanini ◽  
Fabiano Schivardi
Keyword(s):  
Asymmetric Information ◽  
Market Power ◽  
Adverse Selection ◽  
Imperfect Competition ◽  
Structural Model ◽  
Negative Effects ◽  
Credit Supply ◽  
Lines Of Credit ◽  
Credit Demand ◽  
Firm Default

We study the effects of asymmetric information and imperfect competition in the market for small business lines of credit. We estimate a structural model of credit demand, loan use, pricing, and firm default using matched firm-bank data from Italy. We find evidence of adverse selection in the form of a positive correlation between the unobserved determinants of demand for credit and default. Our counterfactual experiments show that while increases in adverse selection increase prices and defaults on average, reducing credit supply, banks’ market power can mitigate these negative effects. (JEL D22, D82, G21, G32, L13, L25)

Competition Tests with a Non-Structural Model: the Panzar–Rosse Method Applied to Germany’s Savings Banks

2009 ◽  
Vol 10 (1) ◽  
pp. 50-70 ◽  
Author(s):  
Horst Gischer ◽  
Mike Stiele
Keyword(s):  
Market Power ◽  
Structural Model ◽  
Monopolistic Competition ◽  
Empirical Models ◽  
Perfect Competition ◽  
Annual Data ◽  
Empirical Application ◽  
Savings Banks ◽  
Banking Market ◽  
Revenue Functions

Abstract In this paper we adopt the Panzar-Rosse approach to assess the competitive conditions in the German banking market for the period from 1993 to 2002.We suggest several improvements to the empirical application of the approach and show that frequently used empirical models that apply price rather than revenue functions lead to biased results. Using disaggregated annual data from more than 400 savings banks (Sparkassen) the empirical findings indicate monopolistic competition, the cases of monopoly and perfect competition are strongly rejected. Furthermore, small banks seem to enjoy even more market power than larger institutions.

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