Price Competition and Market Structure: The Impact of Cartel Policy on Concentration in the UK

George Symeonidis ()

No 2308, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper examines the impact of firms' conduct on market structure. It studies the evolution of concentration in UK manufacturing following the abolition of cartels using a theoretical framework based on Sutton's theory of market structure and a panel data set of four-digit industries over 1958-1977. The econometric results suggest that the intensity of price competition has a positive impact on concentration in exogenous sunk cost industries as well as in advertising-intensive and R&D-intensive industries. The concentration-market size relationship, while negative in exogenous sunk cost industries, breaks down in industries with high advertising or R&D intensity.

Keywords: Cartels; Exogenous and Endogenous Sunk Costs; Market Structure; Price Competition; UK Manufacturing (search for similar items in EconPapers)
JEL-codes: L10 (search for similar items in EconPapers)
Date: 1999-12
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Citations: View citations in EconPapers (3)

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Journal Article: Price Competition and Market Structure: The Impact of Cartel Policy on Concentration in the UK (2000)
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