Measuring competition using the Profit Elasticity: American Sugar Industry, 1890-1914

Jan Boone and Michiel Van Leuvensteijn

No 8159, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The Profit Elasticity (PE) is a new competition measure introduced in Boone (2008). So far, there was no direct proof that this measure can identify regimes of competition empirically. This paper focuses on this issue using data of Genesove and Mullin (1998) in which different regimes of competition are identified. We derive a version of PE suitable for this data set. This competition measure correctly classifies the monopoly/cartel regime as being less competitive than both the price war regime and break-up of cartel regime.

Keywords: Competition; Measures of competition; Price cost margin; Profit elasticity (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2010-12
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Measuring competition using the Profit Elasticity: American Sugar Industry, 1890-1914 (2010)
Working Paper: Measuring Competition using the Profit Elasticity: American Sugar Industry, 1890-1914 (2010)
Working Paper: Measuring competition using the Profit Elasticity: American Suger Industry, 1890 - 1914 (2010)
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