Measuring Competition using the Profit Elasticity: American Sugar Industry, 1890-1914

J. Boone, M. van Leuvensteijn

Research output: Working paperDiscussion paperOther research output

Abstract

The Profit Elasticity (PE) is a new competition measure introduced in Boone (2008). Sofar, there was no direct proof that this measure can identify regimes of competition empirically. This paper focuses on this issue using data of Genesove and Mullin (1998) in which different regimes of competition are identified. We derive a version of PE Suitable for this data set. This competition measure correctly classifies the monopoly/cartel regime as being less competitive than both the price ware regime and break-up of cartel regime.
Original languageEnglish
Place of PublicationTilburg
PublisherTILEC
Number of pages13
Volume2010-043
Publication statusPublished - 2010

Publication series

NameTILEC Discussion Paper
Volume2010-043

Keywords

  • competition
  • measures of competition
  • price cost margin
  • profit elasticity

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