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A new test for monopoly with limited cost data

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  • Moul, Charles C.

Abstract

The test’s intuition is that demand estimates in isolation may diverge from demand estimates under joint estimation with cost if the monopoly null hypothesis is false. Simulations indicate that the test can have substantial power using duopoly data.

Suggested Citation

  • Moul, Charles C., 2012. "A new test for monopoly with limited cost data," Economics Letters, Elsevier, vol. 117(3), pages 891-894.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:891-894
    DOI: 10.1016/j.econlet.2012.07.007
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    References listed on IDEAS

    as
    1. Panzar, John C & Rosse, James N, 1987. "Testing for "Monopoly" Equilibrium," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 443-456, June.
    2. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    3. Steven T. Berry & Joel Waldfogel, 1999. "Free Entry and Social Inefficiency in Radio Broadcasting," RAND Journal of Economics, The RAND Corporation, vol. 30(3), pages 397-420, Autumn.
    4. Liran Einav, 2007. "Seasonality in the U.S. motion picture industry," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 127-145, March.
    5. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
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    Cited by:

    1. Li, Jia & Moul, Charles C., 2015. "Who should handle retail? Vertical contracts, customer service, and social welfare in a Chinese mobile phone market," International Journal of Industrial Organization, Elsevier, vol. 39(C), pages 29-43.

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    More about this item

    Keywords

    Market structure test; Monopoly; Demand estimation;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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