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Imperfect Competition (imperfect + competition)
Selected AbstractsSTEINDL ON IMPERFECT COMPETITION: THE ROLE OF TECHNICAL CHANGEMETROECONOMICA, Issue 3 2006Article first published online: 24 JUL 200, Harry Bloch ABSTRACT Josef Steindl offers an innovative dynamic analysis of competition in Maturity and Stagnation in American Capitalism, with a key role for technical change. However, in his later writings he suggests that he had not gone far enough and that his account was not ,sufficiently dynamic', noting particularly his neglect of fundamental issues in technological development. Here, we critically examine the nature of technical change in Steindl's analysis, pointing to ambiguities and contradictions that arise. Standard characterizations of the nature of technical change are then introduced and used to further integrate technical change into Steindl's analysis of competition. [source] WELFARE-MAXIMISING PRICING IN A MACROECONOMIC MODEL WITH IMPERFECT COMPETITION AND CONSUMPTION EXTERNALITIESAUSTRALIAN ECONOMIC PAPERS, Issue 3 2010CHI-TING CHIN This paper develops a simple macroeconomic model with imperfect competition and consumption externalities, and uses it to examine whether the marginal cost pricing rule in the partial equilibrium framework can apply to the general equilibrium framework. It is shown that, for welfare to be maximised, average revenue should be set equal to marginal cost if consumption externalities are either absent or positive. However, for welfare to be maximised, average revenue should be set higher than marginal cost in the presence of negative consumption externalities. [source] Market Access and WTO Border Tax Adjustments for Environmental Excise Taxes under Imperfect CompetitionJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 4 2005STEVE McCORRISTON The literature identifies linkages between domestic environmental policies and trade, the treatment of imports being an important issue in administration of domestic environmental excise taxes. With the aim of ensuring foreign exporters do not attain a competitive advantage, border tax adjustments are used. Since most environmental excise taxes apply to intermediate goods, the relevant border tax adjustment applies to final imported goods. However, when both intermediate and final goods markets are oligopolistic, border tax adjustments may be non-neutral. Moreover, even if market access is unchanged, border tax adjustments can still lead to redistribution of profits between domestic and foreign firms. [source] Employment Policy, the Crowding-out Effect and Imperfect CompetitionLABOUR, Issue 4 2001Juin-jen Chang This paper presents a macroeconomic model with imperfect competition in the commodity market, and uses it to address how the commodity market's structure is related to the efficacy of government employment policies. It is found that job creation in the public sector may lead to a decrease in output and an increase in prices. In particular, these adverse side-effects will be alleviated when competition in the goods market is less perfect. We also find that public-sector job creation definitely has a positive effect on total employment, though it may crowd out private-sector employment. [source] A Theory of Consumer Boycotts under Symmetric Information and Imperfect Competition,THE ECONOMIC JOURNAL, Issue 511 2006Robert Innes This article models strategic interactions between non-identical duopolistic firms and a public interest/environmental organisation (EO) that promotes ,green' production practices by threatening consumer boycotts against ,brown' producers. The article describes when boycotts are deterred by prior firm commitments to be ,green' and, also when a boycott arises in equilibrium, despite symmetric information. When a boycott arises, it is either a small persistent boycott against the ,small firm' in the industry, or a large transitory boycott against the ,large firm' in the industry that prompts the target firm to accede to the boycott demands quickly. [source] The Macroeconomics of Imperfect Competition and Nonclearing Markets: A Dynamic General Equilibrium ApproachTHE ECONOMIC JOURNAL, Issue 496 2004Leo Kaas No abstract is available for this article. [source] Income Distribution, Price Elasticity and the ,Robinson Effect'THE MANCHESTER SCHOOL, Issue 5 2004Corrado Benassi In The Economics of Imperfect Competition, Joan Robinson argued that an increase of the consumers' incomes should make demand less elastic,which, although reasonable about individual demand as an assumption on preferences, suggests a role for income distribution as far as market demand is concerned. We use Esteban's (International Economic Review, Vol. 27 (1986), No. 2, pp. 439,444) income share elasticity to provide sufficient conditions on income distribution that support the ,Robinson effect',i.e. such that a negative (positive) relationship between individual income and price elasticity translates into a negative (positive) relationship between mean income and market demand elasticity. The paper also provides a framework to study the effects of distributive shocks on the price elasticity of market demand. [source] Effectiveness of Fiscal Policy in a Model of Imperfect Competition With Transactions MoneyAUSTRALIAN ECONOMIC PAPERS, Issue 1 2000Hassan Molana This paper examines the effectiveness of fiscal policy in a general equilibrium macromodel with transactions money and an oligopolistic product market. The results suggest that although money may be neutral and play no direct role as a policy instrument, its indirect impact on the effectiveness of fiscal policy can be quite substantial. In particular, when money balances feature as a choice variable in the households' objective function, (i) fiscal policy becomes ineffective as the weight attached to money is reduced; (ii) the fiscal multiplier becomes negative when the elasticity of substitution between money and leisure exceeds unity; and (iii) it is possible that policy effects are in fact enhanced as the product market becomes more competitive. [source] Competing Mechanisms in a Common Value EnvironmentECONOMETRICA, Issue 4 2000Bruno Biais Consider strategic risk-neutral traders competing in schedules to supply liquidity to a risk-averse agent who is privately informed about the value of the asset and his hedging needs. Imperfect competition in this common value environment is analyzed as a multi-principal game in which liquidity suppliers offer trading mechanisms in a decentralized way. Each liquidity supplier behaves as a monopolist facing a residual demand curve resulting from the maximizing behavior of the informed agent and the trading mechanisms offered by his competitors. There exists a unique equilibrium in convex schedules. It is symmetric and differentiable and exhibits typical features of market-power: Equilibrium trading volume is lower than ex ante efficiency would require. Liquidity suppliers charge positive mark-ups and make positive expected profits, but these profits decrease with the number of competitors. In the limit, as this number goes to infinity, ask (resp. bid) prices converge towards the upper (resp. lower) tail expectations obtained in Glosten (1994) and expected profits are zero. [source] Product Safety Provision and Consumers' InformationAUSTRALIAN ECONOMIC PAPERS, Issue 4 2000Stephan Marette Economic mechanisms related to the provision of product safety are explored, with particular attention paid to the structure of consumers' information. The case of perfect information, of experience goods (for which consumers detect product safety after consumption) and of credence goods (where consumers cannot link a disease to a particular product consumed in the past) are explored. Imperfect competition is assumed in the supply sector. In the case of both perfect information and experience goods, market equilibrium is characterised by a less-than-socially optimal provision of safety, when the safety effort is costly. With credence goods, imperfect information leads to the absence of safety effort and to a market closure. Different types of public regulation aiming at increasing consumer protection and circumventing market failures are explored. Particular attention is paid to minimum safety standards, labels and liability enforcement. The relative efficiency of these instruments depends on the information structure. In the cases of perfect information and experience goods, a minimum safety standard can be an efficient instrument. Regulation is necessary but not sufficient to avoid market failure in the case of credence goods. [source] The Impact of Capital Structure on Efficient Sourcing and Strategic BehaviorFINANCIAL REVIEW, Issue 4 2000Sudha Krishnaswami D43/G32/L14 Abstract We model the capital structure choice of a firm that operates under imperfect competition. Extant literature demonstrates that debt commits a firm to an aggressive output stance, which is an advantage to the firm under Cournot competition. However, empirical evidence, indicates that debt is a disadvantage under imperfect competition. We reconcile the theory with the evidence by incorporating firms' relations with their suppliers, in a model of strategic firmrival interactions. Under imperfect competition and incomplete contracting, we show that although debt financing improves a firm's input sourcing efficiency it could also benefit the firm's rivals by lowering their input costs. This effect offsets the benefits due to aggressive product market strategies that result from increased debt. Under certain conditions this subsidy effect is sufficiently strong that debt is suboptimal in equilibrium and leads to an increase in rival's shareholder value. [source] Environmental Taxation and Induced Structural Change in an Open Economy: The Role of Market StructureGERMAN ECONOMIC REVIEW, Issue 1 2008Christoph Böhringer Environmental taxation; imperfect competition; structural change Abstract. Studies of structural change induced by environmental taxation usually proceed in a perfect-competition framework and typically find structural change to be quite moderate under realistic emission reduction scenarios. By observing that some of the industries affected are likely to operate under imperfect rather than perfect competition, additional mechanisms emerge which may amplify structural change beyond the extent identified as yet. Especially, changes in economies of scale may arise which weaken or strengthen the competitive position of industries over and above the initial cost effect. Using a computable general equilibrium model for Germany to examine the effects of a unilaterally introduced carbon tax, we find that induced structural change is more pronounced under imperfect competition than under perfect competition. At the macroeconomic level, we find that aggregate losses in economies of scale are larger than aggregate gains, implying that the total costs of environmental regulation are higher under imperfect competition than under perfect competition. [source] Negishi's contributions to the development of economic analysis: Research programs and outcomesINTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 2 2008Warren Young B31; C62; D58; D60 This paper surveys Negishi's significant contributions to economics and the research programs they have generated. In a series of papers and books, Negishi developed a number of models and methods of analysis that changed the course of modern economics and catalyzed research in areas that range from welfare and theoretical to applied and computable general equilibrium analysis, and the extension of imperfect competition to general equilibrium. trade theory and international economics. This paper shows that the Negishian research programs that emanated from his works are progressive, and still have an ongoing impact on mainstream economic analysis decades after their publication. [source] On the stabilizing virtues of imperfect competitionINTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 4 2005Thomas Seegmuller D43; E32 We analyze the stabilizing role of imperfect competition on fluctuations as a result of indeterminacy and endogenous cycles. In this paper, imperfect competition is a source of monopoly profits, because of producer market power. Considering an overlapping generations model with capital accumulation and elastic labor supply, we show that under imperfect competition, the emergence of endogenous fluctuations requires a weaker substitution between production factors than under perfect competition. In this sense, imperfect competition stabilizes fluctuations. However, we find an opposite conclusion concerning the elasticity of labor supply. Indeed, endogenous fluctuations are compatible with a less elastic labor supply under imperfect competition. [source] The Accession of the UK to the EC: A Welfare AnalysisJCMS: JOURNAL OF COMMON MARKET STUDIES, Issue 3 2002Michael Gasiorek This article provides a decomposition of the welfare impact on the UK arising from the changes in manufacturing trade consequent upon joining the EC. The methodology employed is that of computable general equilibrium (CGE) modelling, where the underlying model is based on trade under imperfect competition with firms producing under conditions of increasing returns to scale. CGE models can be seen as providing numerical illustrations of theory, or as empirical tools providing estimates of policies. A second aim of this article is then to asses the extent to which CGE models can be used as serious tools of policy analysis. We examine this by assessing the success of the model in replicating counterfactual outcomes. The results indicate (i) that the model does reasonably well in replicating complex reality and that such models can be empirically useful; (ii) that a substantial portion of the welfare impact is attributed to distortions associated with imperfect competition, and that the impact is potentially quite large. [source] Measuring Market Power for Food Retail Activities: French EvidenceJOURNAL OF AGRICULTURAL ECONOMICS, Issue 2 2000Alexandre Gohin In this paper we develop and estimate an empirical model of pricing behaviour for food retail firms in both a quantity-setting oligopoly engaged in the joint production of demand-related final goods and a quantity-setting oligopsony for supply-unrelated wholesale goods. The procedure consists of estimating an inverse demand system for the final goods, single supply functions for the wholesale goods and the retail industry first-order profit-maximisation conditions, from which an estimate of the degree of imperfect competition and of oligopoly-oligopsony power for the different commodities can be retrieved. The model is applied to the French food retail industry and three commodities are distinguished: dairy products, meat products and other food products. We strongly reject the hypothesis that French food retail firms behave competitively, and more than 20 and 17 per cent of the wholesale-to-retail price margins for dairy products and meat products, respectively, can be attributed to oligopoly-oligopsony distortions. [source] Testing for market power in the Australian grains and oilseeds industriesAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 3 2007Christopher J. O'Donnell We formally assess competitive buying and selling behavior in the Australian grains and oilseeds industries using a more realistic empirical model and a less aggregated data set than previously available. We specify a duality model of profit maximization that allows for imperfect competition in both input and output markets and for variable-proportions technologies. Aggregate input-output data are used to define the structure of the relevant industries, and time series data are then used to implement the model for 13 grains and oilseeds products handled by seven groups of agents. The model is estimated in a Bayesian econometrics framework. We find evidence of flour and cereal food product manufacturers exerting market power when purchasing wheat, barley, oats and triticale; beer and malt manufacturers exerting market power when purchasing wheat and barley; and other food product manufacturers exerting market power when purchasing wheat, barley, oats and triticale. [EconLit citations: C11, L66, Q11]. © 2007 Wiley Periodicals, Inc. Agribusiness 23: 349,376, 2007. [source] Employment Policy, the Crowding-out Effect and Imperfect CompetitionLABOUR, Issue 4 2001Juin-jen Chang This paper presents a macroeconomic model with imperfect competition in the commodity market, and uses it to address how the commodity market's structure is related to the efficacy of government employment policies. It is found that job creation in the public sector may lead to a decrease in output and an increase in prices. In particular, these adverse side-effects will be alleviated when competition in the goods market is less perfect. We also find that public-sector job creation definitely has a positive effect on total employment, though it may crowd out private-sector employment. [source] Modelling Wages and Prices in Australia*THE ECONOMIC RECORD, Issue 261 2007GUNNAR BÅRDSEN This paper estimates a simultaneous-equation model of wages and prices for Australia, underpinned by a competing claims framework of imperfect competition. Two separate co-integrating relationships for wages and prices are identified by imposing the economic hypotheses implied by the theory. The steady-state relationships for wages and prices are then embedded in a parsimonious, dynamic wage-price model. The final model is both simple and parsimonious and able to describe the process of wage and price inflation in Australia. [source] Countervailing Duties, Foreign Export Subsidies and Import TariffsTHE JAPANESE ECONOMIC REVIEW, Issue 2 2004Yu-Ter Wang Given that countervailing duties and import tariffs are set in different ways and for different purposes, I re-examine the relationship between countervailing duties, foreign export subsidies and import tariffs under imperfect competition. I find that (i) the optimal countervailing duty depends on the existing import tariff level; (ii) the optimal import tariff is so high that the optimal countervailing duty is zero and hence foreign export subsidization occurs; and (iii) it is more likely for countervailing duties to be imposed on a foreign firm whose government takes no action when other foreign countries reduce or eliminate their subsidies on exports. [source] THE EFFECTS OF FISCAL SHOCKS ON CONSUMPTION: RECONCILING THEORY AND DATA,THE MANCHESTER SCHOOL, Issue 2 2007GIOVANNI GANELLI Recent research has stressed the inconsistency between empirical evidence and the theoretical prediction of both the standard real business cycle and the New Keynesian models regarding the impact of fiscal shocks on consumption. Some authors have attempted to bridge this gap by relying on assumptions about the effects of government spending on preferences and production, or on deviations from the intertemporal optimizing framework. In this paper we follow a different route. We show that introducing at the same time imperfect competition, sticky prices and deviations from Ricardian equivalence through an overlapping generations model helps to solve the inconsistency between theory and data. Our paper can also be seen in the light of the classic controversy between Keynesians and monetarists on the effectiveness of fiscal policy. From this angle, our model can be considered a reincarnation of the classic work of Blinder and Solow (Journal of Public Economics, Vol. 2 (1973), pp. 319,337). [source] WELFARE-MAXIMISING PRICING IN A MACROECONOMIC MODEL WITH IMPERFECT COMPETITION AND CONSUMPTION EXTERNALITIESAUSTRALIAN ECONOMIC PAPERS, Issue 3 2010CHI-TING CHIN This paper develops a simple macroeconomic model with imperfect competition and consumption externalities, and uses it to examine whether the marginal cost pricing rule in the partial equilibrium framework can apply to the general equilibrium framework. It is shown that, for welfare to be maximised, average revenue should be set equal to marginal cost if consumption externalities are either absent or positive. However, for welfare to be maximised, average revenue should be set higher than marginal cost in the presence of negative consumption externalities. [source] MIXED INDUSTRIAL STRUCTURE AND SHORT-RUN FISCAL MULTIPLIERAUSTRALIAN ECONOMIC PAPERS, Issue 2 2008ROBERTO CENSOLO Existing studies on the fiscal multiplier under imperfect competition assume a symmetric market structure with identical firms. This paper examines the fiscal policy implications of introducing a multisectoral economy, where a composite commodity is offered in many varieties within a market of monopolistic competition and a homogeneous good is produced in a perfectly competitive environment. Within the context of this mixed industrial structure we show that the size of the short-run multiplier crucially depends on the composition of public expenditure chosen by the government. [source] Estimation of trade elasticities in the presence of trade barriers, multinationals and imperfect competitionAUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 3 2009Fredoun Z. Ahmadi-Esfahani Recent research highlights the role that multinational trading companies may play in impeding price transmission. In markets characterised by imperfect competition, an estimate of the partial elasticity of demand may be of limited practical value if no account is taken of the reaction of competitors. In this paper, we demonstrate the potential for market structure to affect price transmission and trade elasticities, and challenge the presumption that only government intervention can impact upon price transmission, with examples supporting why theory would suggest otherwise. [source] A factor endowment theory of international trade under imperfect competition and increasing returnsCANADIAN JOURNAL OF ECONOMICS, Issue 1 2005Kenji Fujiwara JEL classification: F10, F12 Une théorie du commerce international fondée sur la dotation de facteurs de production en régime de concurrence imparfaite et de rendements croissants., A partir d'un modèle à deux biens (un bien concurrentiel et un bien imparfaitement concurrentiel) où il y a deux facteurs de production primaires (capital et travail), deux pays impliqués dans le commerce international, et où le secteur imparfaitement concurrentiel a des rendements croissants à l'échelle, on produit une version oligopolistique du théorème de Heckscher-Ohlin. [source] | ||||||||||||||||||||||||||||