CONDUCT IN SPATIAL MARKETS: AN EMPIRICAL ANALYSIS OF SPATIAL PRICING BEHAVIOR

Bruce Benson, Merle D. Faminow and Timothy J. Fik

Papers in Regional Science, 1992, vol. 71, issue 1, 15-30

Abstract: ABSTRACT An empirical procedure for differentiating between organized and competitive spatial oligopoly (or oligopsony) is proposed. The procedure evaluates pricing behavior using a time series of short‐term price data from spatially dispersed locations. Cooperation is implied when price changes at one location are matched instantly at others. Unidirectional price matching arises under price leadership. On the other hand, competitive spatial oligopoly involves lags and feedbacks, as well as stronger relationships between prices in contiguous marketing areas than between prices in spatially separated marketing areas. The procedure is applied in the context of a recent Competition Act case against Canadian meat packers.

Date: 1992
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https://doi.org/10.1111/j.1435-5597.1992.tb01745.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:presci:v:71:y:1992:i:1:p:15-30

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