Nonparametric Tests of Profit Maximization in Oligopoly with Application to the Beef Packing Industry

Paul J. Driscoll, S. Murthy Kambhampaty and Wayne D. Purcell

American Journal of Agricultural Economics, 1997, vol. 79, issue 3, 872-879

Abstract: In this paper, we develop new, nonparametric methods of testing for static profit maximization given noncompetitive behavior. Repeated application of the test yields “maximum likelihood” estimates of the degree of noncompetitive behavior. Using plant-level data, these newly developed nonparametric methods are employed to test the hypothesis that beef packers are profit maximizers and to measure the extent to which packers influence prices in fed-cattle markets. Copyright 1997, Oxford University Press.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:79:y:1997:i:3:p:872-879

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