Elie Appelbaum

THE ESTIMATION OF THE DEGREE OF OLIGOPOLY POWER

Abstract This paper extends the use of econometric production theory techniques to ageneral class of oligopolistic markets. We provide a framework which enables us to estimate the conjectural variation and test various hypotheses about non-competitive behavior. Furthermore, we provide a measure of the degree of oligopolistic power of a firm and a degree of oligopoly index for the whole industry that can be used to test for the underlying structure of the industry. As an example we provide an application to the U.S. rubber, textile, electrical machinery and tobacco industries and find the first two to be characterized by competitive behavior and the last two by oligopolistic behavior.

Seeking Rents by Setting Rents: The Political Economy of Rent Seeking

In recent years, there has been a large number of papers on the subject of rent seeking. Most such works on rent seeking have taken the rent as exogenously determined by regulators. Regulators, howeve r, may also be expected (and indeed have been shown) to be rent seeke rs and hence the determination of the rent itself should be endogeniz ed to reflect the fact that the rent setters are, themselves, rent se ekers. In this paper, the authors do this by presenting an analysis o f the interaction of regulators, firms, and consumers within a rent-s eeking framework where all three groups are assumed to be self-motiva ted. The analysis is carried out under alternative assumptions regard ing the nature of the market and the reaction functions of the partic ipants. Policy implications are drawn where appropriate. Copyright 1987 by Royal Economic Society.

Testing price taking behavior

Abstract The purpose of this paper is to present an empirically implementable technique for the analysis of non-competitive behavior in production. We provide a statistical test for the price taking behavior hypothesis which can be used to distinguish among different market structures. We apply this approach to the U.S. crude petroleum and natural gas industry and find that the price taking behavior hypothesis is not appropriate for this industry.

Transfer seeking and avoidance: On the full social costs of rent seeking

In accordance with certain of its aspects, this invention relates to a process for the preparation of an electrodeposit which contains iron and at least one metal selected from the group consisting of nickel and cobalt which comprises passing current from an anode to a cathode through an aqueous plating solution containing an iron compound and at least one member selected from the group consisting of cobalt compounds and nickel compounds providing cobalt or nickel ions for electrodepositing alloys of iron with cobalt and/or nickel and containing in combination an effective amount of:

Testing neoclassical production theory

Abstract In this paper we propose and carry out some tests that help us evaluate the neoclassical theory of production. First, we use the implied relationship between cost (production) and (inverse) derived demand equations to provide a test which can be interpreted as a test for the validity of the theory. Then, using the same relationships we provide a test for the internal consistency of the theory. Finally, we examine the extent to which the primal and dual models yield the same implications. We find that except for one case the theory does not pass the proposed tests and furthermore, the primal and dual do not yield the same implications.

Estimation of moments and production decisions under uncertainty

The purpose of this paper is to examine production decisions under output price uncertainty. Using a nonparametric estimation technique to estimate the first four moments of the unknown price distribution and applying duality, we provide a simple empirical framework for the analysis of supply and demand decisions under price uncertainty. The model is used to examine the importance of higher moments in the firms production decisions and to investigate underlying attitudes toward risk.

Rent seeking and entry

Abstract It is the purpose of this paper to develop a market equilibrium model of rent seeking with entry. The model determines the optimal amount of rent seeking activities by individuals, the equilibrium number of rent seekers and hence also the total amount of rent seeking in the industry.

Import Price Uncertainty and the Distribution of Income

In this paper we estimate oil and nonoil import demand functions for the United States under the assumption that import prices are uncertain. Both import demand functions are formally derived from an expected utility maximization problem, treating imports as inputs to the technology. The model allows us to test for risk aversion and to assess the impact of uncertainty on the volume of imports, gross output, and the distribution of income. We find that uncertainty leads to a reduction in welfare, imports, and gross output. Moreover, it hurts labor relatively much more than capital. The impact of uncertainty, however, is found to be quite small.

Demand conditions, regulation, and the measurement of productivity

Abstract Most econometric studies of productivity use partial equilibrium analysis of cost models to estimate and measure productivity growth. In this paper we provide a market equilibrium model in which supply (cost), demand, and regulatory conditions are explicitly taken into account. The model is used to calculate the rate of growth in cost efficiency (productivity) in the Israeli bus transit sector and to explain this growth by the contributions of input prices, technical change, output scale, demand conditions, and government regulation.

Uncertainty and the measurement of productivity

The purpose of this paper is to provide an empirically implementable framework for the analysis of the effects of uncertainty on firm behavior. In particular, the paper provides a model which can be used to calculate productivity growth for firms facing uncertainty and to decompose the growth in total factor productivity into its various components. It can also be used to identify the contributions of uncertainty and risk aversion.Applying the model to the U.S. textile industry, we find that price uncertainty had a small effect on productivity growth.