arXiv 6 Oct 2023 · Econometrics
arXiv:2310.04576 · PDF · DOI · OpenAlex · Extracted main text
We theoretically prove why statistically rejecting the null hypothesis of perfect competition is challenging, known as a common problem in the literature. We also assess the finite sample performance of the conduct parameter test in homogeneous goods markets, showing that statistical power increases with the number of markets, a larger conduct parameter, and a stronger demand rotation instrument. However, even with a moderate number of markets and five firms, rejecting the null hypothesis of perfect competition remains difficult, irrespective of instrument strength or the use of optimal instruments. Our findings suggest that empirical results failing to reject perfect competition are due to the limited number of markets rather than methodological shortcomings.
appendix boundary found by appendix_command · 92% of the source is main text. Read the extracted text to check this.
The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Genesove and Mullin (1998) Testing static oligopoly models: conduct and cost in the sugar industry, 1890-1914 | 1.000 | 6 | 3 | 100% |
| 2 | Shaffer (1993) A test of competition in Canadian banking | 1.000 | 5 | 3 | 100% |
| 3 | Steen and Salvanes (1999) Testing for market power using a dynamic oligopoly model | 1.000 | 5 | 3 | 100% |
| 4 | Bresnahan (1982) The oligopoly solution concept is identified | 0.737 | 3 | 2 | 100% |
| 5 | Matsumura and Otani (2023) Resolving the conflict on conduct parameter estimation in homogeneous goods markets between Bresnahan (1982) and Perloff and She… | 0.644 | 3 | 2 | 67% |
| 6 | Chamberlain (1987) Asymptotic efficiency in estimation with conditional moment restrictions | 0.644 | 2 | 2 | 100% |
| 7 | Reynaert and Verboven (2014) Improving the performance of random coefficients demand models: The role of optimal instruments | 0.644 | 2 | 2 | 100% |
| 8 | Puller (2007) Pricing and firm conduct in California's deregulated electricity market | 0.585 | 3 | 1 | 100% |
| 9 | Bettendorf and Verboven (2000) Incomplete transmission of coffee bean prices: evidence from the Netherlands | 0.511 | 2 | 1 | 100% |
| 10 | Clay and Troesken (2003) Further tests of static oligopoly models: Whiskey, 1882–1898 | 0.511 | 2 | 1 | 100% |
Showing the top 10 of 23 scored citations.
arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.
| Citing paper | Intensity | Mentions | Sections | |
|---|---|---|---|---|
| 1 | Conduct Parameter Estimation in Homogeneous Goods Markets with Equilibrium Existence and Uniqueness Conditions: The Case of Log-linear Specification | 0.405 | 1 | 1 |