PARAMETRIC AND NONPARAMETRIC MARKET POWER TESTS: AN EMPIRICAL INVESTIGATION

Corinna M. Noelke and Kellie Raper

No 20875, 1998 Annual meeting, August 2-5, Salt Lake City, UT from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Parametric and nonparametric market power tests most commonly used to assess imperfectly competitive behavior are identified. Monte Carlo experiments are used to assess the accuracy of eight nonparametric tests. The results are compared to Raper, Love, and Shumway's (1997) findings concerning three parametric market power tests in the Bresnahan-Lau tradition. Both monopolistic and monopsonistic market power tests are implemented using data from 10 known market structures. Only two of the nonparametric market power tests distinguish between market structures adequately. The parametric tests perform well, although functional form bias is not investigated in this study.

Keywords: Industrial Organization; Marketing (search for similar items in EconPapers)
Pages: 22
Date: 1998
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea98:20875

DOI: 10.22004/ag.econ.20875

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