EconPapers    
Economics at your fingertips  
 

Do Increasing Markups Matter? Lessons from Empirical Industrial Organization

Steven Berry (), Martin Gaynor and Fiona Scott Morton

No 26007, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper considers the recent literature on firm markups in light of both new and classic work in the field of Industrial Organization. We detail the shortcomings of papers that rely on discredited approaches from the “structure-conduct-performance” literature. In contrast, papers based on production function estimation have made useful progress in measuring broad trends in markups. However, industries are so heterogeneous that careful industry specific studies are also required, and sorely needed. Examples of such studies illustrate differing explanations for rising markups, including endogenous increases in fixed cost associated with lower marginal costs. In some industries there is evidence of price increases driven by mergers. To fully understand markups, we must eventually recover the key economic primitives of demand, marginal cost, and fixed and sunk costs. We end by discussing the various aspects of antitrust enforcement that may be of increasing importance regardless of the cause of increased markups.

JEL-codes: L0 L1 L4 (search for similar items in EconPapers)
Date: 2019-06
New Economics Papers: this item is included in nep-com and nep-ind
Note: IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (121)

Published as Steven Berry & Martin Gaynor & Fiona Scott Morton, 2019. "Do Increasing Markups Matter? Lessons from Empirical Industrial Organization," Journal of Economic Perspectives, vol 33(3), pages 44-68.

Downloads: (external link)
http://www.nber.org/papers/w26007.pdf (application/pdf)

Related works:
Journal Article: Do Increasing Markups Matter? Lessons from Empirical Industrial Organization (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:26007

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w26007

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.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-19
Handle: RePEc:nbr:nberwo:26007