Estimating Market Power and Strategies

This book presents, compares, and develops various techniques for estimating market power - the ability to set price profitably above marginal cost - and strategies - the game-theoretic plans used by firms to compete with rivals. The authors start by examining static model approaches to estimating market power. They extend the analysis to dynamic models. Finally, they develop methods to estimate firms' strategies directly and examine how these strategies determine market power. A detailed technical appendix reviews the relevant information-theoretic and other econometric models that are used throughout. Questions and detailed answers for students and researchers are provided in the book for easy use.

Jeffrey M. Perloff is a professor in and Chair of the Department of Agricultural and Resource Economics at the University of California, Berkeley. He has written the textbooks Modern Industrial Organization (coauthored with Dennis Carlton) and Microeconomics. Larry S. Karp is a professor in the Department of Agricultural and Resource Economics at the University of California, Berkeley. He also teaches at University of Southampton, U.K. Amos Golan is a professor in the Department of Economics at American University. He cowrote Maximum Entropy Econometrics: Robust Elimination with Limited Data (with George Judge and Douglas Miller).