Testing for Market Power under the Two-Price System in the U.S. Copper Industry

Claudio Agostini

ILADES-Georgetown University Working Papers from Ilades-Georgetown University, School of Economics and Bussines

Abstract: Before 1978, most of the U.S. domestic copper production and an important fraction of the imports were traded at a price set by the major U.S. producers. Simultaneously, the rest of the world was trading copper at prices determined in auction markets. This two-price system ended in 1978, when the largest U.S. producers began using the Comex price of refined copper as a benchmark for setting their prices. Using this regime shift I test empirically the competitive behavior of the US copper industry before 1978. The results show that copper prices were close to the ones predicted by a competitive model of the industry.

Keywords: Copper Industry; Market Power (search for similar items in EconPapers)
JEL-codes: D40 D43 L13 L61 L72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-mic
Date: 2005-03
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