 The Gains and Losses From Industrial ConcentrationSam Peltzman () No 163, NBER Working Papers from National Bureau of Economic Research, Inc Abstract: In essence, this paper will try to decompose the concentration-profits relationship into separate concentration-price arid concentration-cost relationships. By doing this, I hope to shed light on some of the allocative and distributive issues that, I suspect, give the subject its intrinsic interest, but which have not so far been confronted empirically: Does high concentration save or waste resources? Does it lead to higher prices? Who gains and loses from a social policy hostile to high concentration? Since the unique aspect of the paper is its focus on a concentration-cost relationship, most of the analytical effort is spent here. I review the theory underlying such a relationship, and develop and implement a model designed to estimate its importance. Subsequently, I try to estimate how much of the usual profit-concentration relationship is due to cost effects and how much to price effects. The main conclusion is that, while price effects are not absent, the cost effects so dominate them as to cast doubt on the efficacy of any general legal rule hostile to industrial concentration. Date: 1977-01 Published as Journal of Law and Economics, Vol. 20, no. 2 (1977): 229-264. Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:0163 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC. |
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