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Identifying price-leadership structures in oligopoly

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  • Sang-Hyun Kim
  • Hao Lan
  • Paul W Dobson

Abstract

Oligopoly can give rise to complex patterns of price interaction and adjustment. While oligopolistic firms may divide into price leaders and price followers, it is conceivable that some may take on dual roles, being a leader to one group but a follower to a different group in a hierarchical structure. The contribution of this article is to show how such dual relationships are possible in theory along with providing an empirical method to help identify price-leadership structures in n-firm oligopoly. As an illustration, we apply the method to British supermarkets and find a three-tier leader–follower structure.

Suggested Citation

  • Sang-Hyun Kim & Hao Lan & Paul W Dobson, 2021. "Identifying price-leadership structures in oligopoly," Oxford Economic Papers, Oxford University Press, vol. 73(1), pages 350-370.
    • Handle: RePEc:oup:oxecpp:v:73:y:2021:i:1:p:350-370.
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    File URL: http://hdl.handle.net/10.1093/oep/gpz066
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    Cited by:

    1. Yiquan Gu & Leonardo Madio & Carlo Reggiani, 2019. "Exclusive Data, Price Manipulation and Market Leadership," CESifo Working Paper Series 7853, CESifo.

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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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