Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Monday, April 15, 2013

Testing Market Power with Profit Functions: a Dual Approach with Normalized Quadratic

Posted by D. Daniel Sokol

Zhifeng Gao (University of Florida) and Charles Moss (University of Florida) are Testing Market Power with Profit Functions: a Dual Approach with Normalized Quadratic.

ABSTRACT: The dual relationship between parameters of normalized quadratic cost and profit functions is determined when firms can implement market power on the output market. An approach is developed to test the market power by comparing the profits of a firm with and without market power. Simulations demonstrate the efficiency of this approach.

http://lawprofessors.typepad.com/antitrustprof_blog/2013/04/testing-market-power-with-profit-functions-a-dual-approach-with-normalized-quadratic-.html

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