Identifying Price-Leadership Structures in Oligopoly

Paul W. Dobson, Sang-Hyun Kim and Hao Lan
Additional contact information
Paul W. Dobson: University of East Anglia

No 2016rwp-99, Working papers from Yonsei University, Yonsei Economics Research Institute

Abstract: Oligopoly can give rise to complex patterns of price interaction and price adjustment. While firms in oligopolistic markets may divide into price leaders and price followers, it is not inconceivable that some may take on dual roles, being a leader to one group but a follower to a different group. Thus who leads and who is led can be complicated and hierarchical. To help disentangle such pricing relationships, this paper develops a method to empirically identify price-leadership structures in n-firm oligopolistic markets by generalizing the duopoly method proposed by Seaton and Waterson (2013). Applying the method to UK food retailing industry, our analysis finds that it has a three-tier structure in which the two largest players (Tesco and Asda), tend to price-lead other retailers, while the other two of the Big 4 major chains (Sainsbury and Morrisons) play both follower (to the top two) and leader (to the smaller, premium/convenience positioned supermarket chains).

Keywords: Price leadership; oligopolistic markets; UK food retailing industry (search for similar items in EconPapers)
JEL-codes: D43 L13 L41 L81 (search for similar items in EconPapers)
Pages: 25pages
Date: 2016-11
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://121.254.254.220/repec/yon/wpaper/2016rwp-99.pdf (application/pdf)

Related works:
Journal Article: Identifying price-leadership structures in oligopoly (2021)
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:yon:wpaper:2016rwp-99

Access Statistics for this paper

More papers in Working papers from Yonsei University, Yonsei Economics Research Institute Contact information at EDIRC.
Bibliographic data for series maintained by YERI ().