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Dynamic Gains and Static Losses in Oligopoly: Evidence from the Beer Industry

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  • Gisser, Mica

Abstract

The paper provides a new perspective on the estimate of the welfare losses due To oligopoly. I argue that the conventional analysis of monopoly/oligopoly welfare Losses can be misleading. If causation runs from investment in new technology to Increased concentration, dynamic gains from innovation should be taken into account for a fuller analysis of welfare losses. I use beer-industry data to demonstrate That technological changes Granger-cause beer prices, and beer prices Granger-cause the Herfindahl index. I then estimate the dynamic gains to consumers in the beer industry and find these gains to be impressive relative to conventional static Losses. Copyright 1999 by Oxford University Press.

Suggested Citation

  • Gisser, Mica, 1999. "Dynamic Gains and Static Losses in Oligopoly: Evidence from the Beer Industry," Economic Inquiry, Western Economic Association International, vol. 37(3), pages 554-575, July.
    • Handle: RePEc:oup:ecinqu:v:37:y:1999:i:3:p:554-75
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    Cited by:

    1. Rauch, Ferdinand, 2013. "Advertising expenditure and consumer prices," International Journal of Industrial Organization, Elsevier, vol. 31(4), pages 331-341.
    2. Dickson Vaughan A & Sun Yingfeng, 2004. "Revisiting the Price Effects of Rising Concentration in U.S. Food Manufacturing," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-17, December.
    3. P. Bielik & J. Pokrivčák & A. Qineti & N. Pokrivčáková, 2006. "The spillover effect of foreign direct investment - the case of Slovak beer and malt production sector," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 52(8), pages 347-352.
    4. Natsuko Iwasaki & Barry Seldon & Victor Tremblay, 2008. "Brewing Wars of Attrition for Profit (and Concentration)," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(4), pages 263-279, December.
    5. Whitley John, 2002. "The Gains and Losses from Agricultural Concentration: A Critical Survey of the Literature," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-20, October.
    6. Yin Xia & Steven Buccola, 2003. "Factor Use and Productivity Change in the Alcoholic Beverage Industries," Southern Economic Journal, John Wiley & Sons, vol. 70(1), pages 93-109, July.
    7. Bhuyan Sanjib & McCafferty Michael, 2013. "U.S. Brewing Industry Profitability: A Simultaneous Determination of Structure, Conduct, and Performance," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 139-150, November.

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