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Cooperative Antitrust Monopolization and the Theory of Contestable Markets

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  • Centner, Terence J.
  • Wetzstein, Michael E.

Abstract

The judiciary has relied on a firm's market share to evaluate the presence of monopoly power for a Sherman Act monopolization violation. However, an allegation that a firm's market share constitutes monopoly power may be refuted by evidence that there exists a contestable market. Contestable market theory shows that there is no monopoly power where there exists a threat of entry of other firms. This theory thereby offers agricultural cooperatives, which may have a large market share by reasons of the antitrust immunity provided by the Capper-Volstead Act, an argument to overcome allegations of a Sherman Act monopolization violation.

Suggested Citation

  • Centner, Terence J. & Wetzstein, Michael E., 1984. "Cooperative Antitrust Monopolization and the Theory of Contestable Markets," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 16(1), pages 129-136, July.
    • Handle: RePEc:cup:jagaec:v:16:y:1984:i:01:p:129-136_01
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    References listed on IDEAS

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    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    2. E. V. Jesse & B. W. Marion & A. C. Manchester & Aaron. C. Johnson, 1982. "Interpreting and Enforcing Section 2 of the Capper-Volstead Act," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(3), pages 431-443.
    3. Stephen H. Sosnick, 1958. "A Critique of Concepts of Workable Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 72(3), pages 380-423.
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