Document Type
Article
Journal/Book Title/Conference
Economics Research Institute Study Paper
Volume
15
Publisher
Utah State University Department of Economics
Publication Date
2002
Rights
Copyright for this work is held by the author. Transmission or reproduction of materials protected by copyright beyond that allowed by fair use requires the written permission of the copyright owners. Works not in the public domain cannot be commercially exploited without permission of the copyright owner. Responsibility for any use rests exclusively with the user. For more information contact the Institutional Repository Librarian at digitalcommons@usu.edu.
First Page
1
Last Page
28
Abstract
This paper incorporates inventory dynamics into an analysis of market power. Using a model in which each fIrm accounts for the effect of its current action on the current and future actions of itself and its competitors, we show that measures of market power that ignore inventory dynamics are biased. We then apply the model to the beef-packing industry using annual data on cattle stocks, slaughter and prices from 1933-1999. Our estimates suggest that static measures overestimate the amount of market power exerted by beef-packing fIrms.
Recommended Citation
Hunnicutt, Lynn and Aadland, David, "Market Power With Dynamic Inventory Constraints: The Bias in Standard Measures" (2002). Economic Research Institute Study Papers. Paper 248.
https://digitalcommons.usu.edu/eri/248