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Are There Any Cournot Industries in Japan?

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  • David Flath

Abstract

For each of the seventy Japanese four-digit SIC manufacturing industries, using annual data for 1961-90, I test the simple Cournot hypothesis of proportionality between industry price-cost margin and Herfindahl index against the non-nested alternative that the industry price-cost margin remains constant in the face of varying Herfindahl index, as it would under a simple product-differentiated Bertrand framework. I then test each of these against the alternative hybrid specification that nests both of them, and from the pairwise tests, compute likelihoods of each specification. The simple Cournot specification is the most likely for five of the industries, the simple Bertrand specification for thirty-five, and the hybrid specification for thirty.

Suggested Citation

  • David Flath, 2012. "Are There Any Cournot Industries in Japan?," Japanese Economy, Taylor & Francis Journals, vol. 39(2), pages 3-36.
    • Handle: RePEc:mes:jpneco:v:39:y:2012:i:2:p:3-36
    DOI: 10.2753/JES1097-203X390201
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    Citations

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    Cited by:

    1. Michael Kopel & Eva Maria Putz, 2021. "Information sharing in a Cournot–Bertrand duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(7), pages 1645-1655, October.
    2. Basak, Debasmita, 2021. "Cournot-Bertrand equilibria under two-part tariff contract," MPRA Paper 109588, University Library of Munich, Germany.
    3. Tomomichi Mizuno & Kazuhiro Takauchi, 2024. "Bertrand competition in vertically related markets," Applied Economics Letters, Taylor & Francis Journals, vol. 31(6), pages 524-529, March.
    4. Ki‐Dong Lee & Kangsik Choi, 2024. "Uniform versus discriminatory tariffs when competition mode is endogenous," Bulletin of Economic Research, Wiley Blackwell, vol. 76(1), pages 95-120, January.
    5. Andrei Bazhanov & Yuri Levin & Mikhail Nediak, 2019. "Resale Price Maintenance with Strategic Customers," Production and Operations Management, Production and Operations Management Society, vol. 28(3), pages 535-549, March.
    6. Tomomichi Mizuno & Kazuhiro Takauchi, 2020. "Optimal Export Policy With Upstream Price Competition," Manchester School, University of Manchester, vol. 88(2), pages 324-348, March.
    7. Aviv, Yossi & Bazhanov, Andrei & Levin, Yuri & Nediak, Mikhail, 2016. "Quantity Competition under Resale Price Maintenance when Most Favored Customers are Strategic," MPRA Paper 72011, University Library of Munich, Germany.
    8. Semenov, Aggey & Tondji, Jean-Baptiste, 2019. "On the Dynamic Analysis of Cournot–Bertrand Equilibria," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    9. Debasmita Basak, 2023. "Price and Quantity Competition under Vertical Pricing," Games, MDPI, vol. 14(4), pages 1-8, June.
    10. Luo, Huajiang & Niu, Baozhuang, 2022. "Impact of competition type on a competitive manufacturer's preference of decision timing," International Journal of Production Economics, Elsevier, vol. 251(C).
    11. Karbowski Adam & Prokop Jacek, 2020. "The Impact of Patents and R&D Cooperation on R&D Investments in a Differentiated Goods Industry," South East European Journal of Economics and Business, Sciendo, vol. 15(1), pages 122-133, June.
    12. John Gilbert & Onur A. Koska & Reza Oladi, 2023. "Foreign market entry, upstream market power, and endogenous mode of downstream competition," Review of International Economics, Wiley Blackwell, vol. 31(1), pages 341-362, February.
    13. John Gilbert & Onur A. Koska & Reza Oladi, 2022. "International trade, differentiated goods, and strategic asymmetry," Southern Economic Journal, John Wiley & Sons, vol. 88(3), pages 1178-1198, January.
    14. Kangsik Choi & Seonyoung Lim, 2023. "Input Price Discrimination in Endogenous Competition Mode," The Japanese Economic Review, Springer, vol. 74(2), pages 301-330, April.
    15. Bloomfield, Matthew J., 2021. "Compensation disclosures and strategic commitment: Evidence from revenue-based pay," Journal of Financial Economics, Elsevier, vol. 141(2), pages 620-643.

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