A Note on the Size of Trading Blocs, Market Power and World Welfare Effects

The size of trading blocs Market power and world welfare effects

Journal of International Economics ◽

10.1016/0022-1996(95)01412-8 ◽

1996 ◽

Vol 40 (3-4) ◽

pp. 411-437 ◽

Cited By ~ 105

Author(s):

Eric W. Bond ◽

Constantinos Syropoulos

Keyword(s):

Market Power ◽

Welfare Effects ◽

Trading Blocs

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Mergers in durable-goods industries: A re-examination of market power and welfare effects

Research in Economics ◽

10.1016/j.rie.2016.07.007 ◽

2016 ◽

Vol 70 (4) ◽

pp. 677-692

Author(s):

Ari D. Gerstle ◽

Michael Waldman

Keyword(s):

Market Power ◽

Durable Goods ◽

Welfare Effects

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8. The economics of agreements, collusion, and parallel conduct

Competition Law of the EU and UK ◽

10.1093/he/9780198725053.003.0008 ◽

2019 ◽

pp. 180-191

Author(s):

Sandra Marco Colino

Keyword(s):

Market Power ◽

Welfare Effects ◽

Vertical Restraints ◽

Oligopoly Markets ◽

Firm Conduct

A group of firms can act together and damage the market and produce unwelcome welfare effects. This is known as a ‘cartel’ or ‘cartelization’. However, multi-firm conduct is often a more difficult phenomenon to analyse and identify than single firm or monopoly behaviour. This chapter discusses horizontal restraints, vertical agreements, and vertical restraints. Horizontal agreements may raise concerns that competition is being harmed, but collusion may be difficult to detect. The problems of policing horizontal conduct may be exacerbated in oligopoly markets, where there are few competitors which frequently mimic each other’s conduct without necessarily coordinating. Cartel arrangements may be difficult to put in place, but may have long-term success. Vertical agreements are less likely to raise competitive concern, unless they are linked to the exercise of market power, or contribute to the exclusion of competitors from a market.

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Zone Pricing in Retail Oligopoly

American Economic Journal Microeconomics ◽

10.1257/mic.20170130 ◽

2019 ◽

Vol 11 (1) ◽

pp. 124-156 ◽

Cited By ~ 4

Author(s):

Brian Adams ◽

Kevin R. Williams

Keyword(s):

Market Power ◽

Price Discrimination ◽

Consumer Surplus ◽

Welfare Effects ◽

Rural Markets ◽

Home Improvement ◽

Home Depot ◽

Zone Pricing

We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home-improvement industry, we find that Home Depot would benefit from finer pricing but that Lowe’s would prefer coarser pricing. Zone pricing softens competition in markets where firms compete, but it shields consumers from higher prices in rural markets, where firms might otherwise exercise market power. Overall, zone pricing produces higher consumer surplus than finer price discrimination does. (JEL D43, L13, L81, M31, R32)

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Sequential Markets, Market Power, and Arbitrage

The American Economic Review ◽

10.1257/aer.20141529 ◽

2016 ◽

Vol 106 (7) ◽

pp. 1921-1957 ◽

Cited By ~ 32

Author(s):

Koichiro Ito ◽

Mar Reguant

Keyword(s):

Market Power ◽

Electricity Market ◽

Imperfect Competition ◽

Strategic Behavior ◽

Structural Model ◽

Firm Behavior ◽

Welfare Effects ◽

Price Premium ◽

Model Predictions ◽

Price Differences

We develop a framework to characterize strategic behavior in sequential markets under imperfect competition and restricted entry in arbitrage. Our theory predicts that these two elements can generate a systematic price premium. We test the model predictions using microdata from the Iberian electricity market. We show that the observed price differences and firm behavior are consistent with the model. Finally, we quantify the welfare effects of arbitrage using a structural model. In the presence of market power, we show that full arbitrage is not necessarily welfare-enhancing, reducing consumer costs but increasing deadweight loss. (JEL D42, D43, L12, L13, L94, Q41)

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Testing Market Power and Welfare Effects in the US Catfish Industry

Journal of Agricultural & Food Industrial Organization ◽

10.1515/jafio-2019-0025 ◽

2020 ◽

Vol 0 (0) ◽

Author(s):

Giap V. Nguyen ◽

Curtis M. Jolly ◽

Thong T. Nguyen

Keyword(s):

Market Power ◽

Welfare Effects ◽

Microeconomic Theory ◽

Negative Effects ◽

Competitive Game ◽

The Us ◽

Conjectural Variations ◽

Supply Flexibility

AbstractAn empirical specification of the conjectural variations model, which conforms to microeconomic theory, is estimated for the US catfish industry. We find the existence of market power exerted by US catfish processors. Processors force the price paid to catfish growers down by 52.88 cent per pound of live catfish, which costs US catfish growers about $300 million a year. US catfish growers can deter the negative effects of processors’ market power by increasing their farm supply flexibility. Further studies are needed to address the dynamics and competitive game strategies in the US catfish industry.

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