A non-parametric test of a first-order Markov process for regimes in a non-cooperatively collusive industry

Berry, Steven; Briggs, Hugh C.

doi:10.1016/0165-1765(88)90222-4

Cited by 20 publications

(16 citation statements)

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“…This includes Porter (1983), Lee and Porter (1984), Cosslett and Lee (1985), Porter (1985), Berry and Briggs (1988), Hajivassiliou (1989), and Ellison (1994). These studies focus primarily on examining explicit models of collusion, and the extent to which the observed data can be explained by particular theoretical models.…”

Section: Background and Datamentioning

confidence: 99%

Identification and estimation of firms' marginal cost functions with incomplete knowledge of strategic behavior

Rosen

2007

Working Paper Series

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In this paper I develop a new approach for identi…cation and estimation of the parameters of an oligopoly model, without relying on a potentially unveri…able equilibrium assumption. Rather, I consider inference on model parameters when the researcher does not know precisely what decision rule …rms use, but is willing to consider a set of possibilities. In contrast to traditional approaches in the literature, the proposed methodology allows …rm behavior to vary ‡exibly across observations, in a manner consistent with many Nash Equilibria. I derive identi…cation results for both homogeneous product and di¤erentiated product markets. Due to the ‡exibility a¤orded to …rm behavior, the parameters of …rms' marginal cost functions may only be set identi…ed rather than point identi…ed. The restrictions of the model are, however, still informative. I …nd that the size of the identi…ed set for marginal cost parameters depends on the elasticity of market demand, the set of decision rules considered, and the functional form assumptions imposed. I formulate how to compute consistent set estimates for marginal cost parameters and demonstrate the proposed methodology with price and quantity data on the Joint Executive Committee, a 19th century railway cartel. To perform statistical inference I implement the methodology of Rosen (2005) to construct asymptotically valid con…dence regions for the partially identi…ed marginal cost parameters. The application illustrates how

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Section: Background and Datamentioning

confidence: 99%

Identification and estimation of firms' marginal cost functions with incomplete knowledge of strategic behavior

Rosen

2007

Working Paper Series

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ResumoO artigo considera a aplicação do teste não paramétrico proposto por Berry and Briggs (1988) para o modelo de colusão com monitoramento imperfeito de Abreu et al (1986) no contexto de mercados regionais de cimento no Brasil durante o período de 1992 a 2003. O teste foca na implicação daquele modelo, segundo a qual os preços seguiriam um processo de Markov de primeira ordem.

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“…Uma implicação testável desse modelo é de que regimes de lucros elevados e lucros baixos obedecem a um processo de Markov de primeira ordem e, caso se tenha uma variável indicador que evidencie a prevalência ou não de guerra de preços, pode-se conceber um teste estatístico. De fato, Berry & Briggs (1988) e Briggs (1996 consideram um teste não-paramétrico com esse propósito no contexto do JEC e conseguem obter evidências consistentes com o modelo de APS.…”

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Colusão ótima com monitoramento imperfeito: teste do modelo de Abreu-Pearce-Stachetti para os mercados brasileiros regionais de cimento

Zeidan¹,

Resende²

2010

Econ. Apl.

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ResumoO artigo considera a aplicação do teste não paramétrico proposto por Berry and Briggs (1988) para o modelo de colusão com monitoramento imperfeito de Abreu et al. (1986) no contexto de mercados regionais de cimento no Brasil durante o período de 1992 a 2003. O teste foca na implicação daquele modelo, segundo a qual os preços seguiriam um processo de Markov de primeira ordem. A evidência não indica prevalência de mecanismo de colusão ótima para aqueles mercados. Palavras-chave: Teoria dos Jogos, Mercado de Cimento, Guerra de Preços AbstractThe paper considers the application of the non-parametric test proposed by StateBerry and Briggs (1988) for the model of collusion with imperfect monitoring by Abreu et al (1986) in the context of regional cement markets in Brazil during the 1992-2003 period. The test focuses on the implication of that model according to which the prices would follow a first-order Markov process. The evidence does not indicate the prevalence of optimal collusion in those markets.

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“…Other studies have estimated conduct in the Canadian food processing industry (Lopez (1984), the interwar Aluminum industry (Suslow (1986)), the coffee roasting industry (Gollop and Roberts (1979), and Roberts (1984)), retail gasoline (Slade (1987)), and the television manufacturing industry (Karp and Perloff (1989) Porter's influential (1983) study of the nineteenth century railroad cartel, the Joint Executive Committee, detected a pattern of equilibrium price wars consistent with the Green-Porter (1984) model. This study has led to a body of research, with contributions by Lee and Porter (1984), Porter (1985), Berry and Briggs (1988) and Ellison (1994).…”

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confidence: 99%

Validating the Conjectural Variation Method: The Sugar Industry, 1890- 1914

Genesove¹,

Mullin²

1995

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A non-parametric test of a first-order Markov process for regimes in a non-cooperatively collusive industry

Cited by 20 publications

References 5 publications

Identification and estimation of firms' marginal cost functions with incomplete knowledge of strategic behavior

Identification and estimation of firms' marginal cost functions with incomplete knowledge of strategic behavior

Colusão ótima com monitoramento imperfeito: teste do modelo de Abreu-Pearce-Stachetti para os mercados brasileiros regionais de cimento

Validating the Conjectural Variation Method: The Sugar Industry, 1890- 1914

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