Competition in the Interexchange Telecommunication Market

Estimating market power in the presence of capacity constraints: An application to high-fructose corn sweetener

“…Residual-demand curves differ from ordinary Marshallian demand curves because the potentially endogenous prices of substitutes have been replaced by best-response functions which include only exogenous cost and demand shifters for those goods as explanatory variables. Building on the contributions of Baker and Bresnahan (1984, 1988, who demonstrated the relative simplicity of the technique, economists have applied residual-demand analysis variously to airline travel - Beutel and McBride (1992); aluminum - Yang (1996); catsup - Haller and Cotterill (1996); nursing home services - Mukamel and Spector (2002); soft-drinks - Higgins (1995); and telecommunications - Krouse and Park (2003).…”