the theory of concentration oligopsony
زمستان 1384 - شماره 15 (12 صفحه - از 81 تا 92)
This paper originates the theory of buyer concentration for a main raw material input for a single processing industry. The oilgopsony concentration is obtained and subsequently decomposed into several factors, affecting indirectly the industry''''s profitability. It is found that the leading firms'''' efficiencies hypothesis is reaffirmed due to variations associated with the marginal productivity differentials. This finding is based on concentration separation approach rather than analyzing the cost-efficiency effect against market power effect from increasing concentration on the industry''''s markup, provided by structural approach of minimum cost function.خلاصه ماشینی:
"In a few recent studies, the concentration effects of economic performance has been separated out between market power versus cost efficiency using structural models developed by Azzam (1997), Azzam and Schroeter (1995) in oligopsoneis, however it is discussed by Schroeter and Azzam (1991), and Lopez, Azzam and Carmen (2002) in the oiligopolies. Its first part is the inverse of the number of firms as a lower bound and the second part is responsive for the price elasticity of material input supply, the degree of collusion and the coefficient of variation in marginal productivity differentials. As shown by equation (6), the inverse of the number of firms is the level of concentration at the value of the lower limit and its additional component is depended on the degree of the buyers'''' collusion and the industry price elasticity of material input supply. Differentiation of equation (6) with respect to its parameters indicates that the buyer concentration index will be higher if (1) the degree of collusion is larger, (2) the industry price elasticity of material input supply is greater and (3) the coefficient of variation in marginal productivities differentials is higher. The impact of the material input supply elasticity with respect to price on the industry ratio is indeterminate since its direct effect denoted is negative, using equation (4), and its indirect effect through concentration variations is positive as termed by. However, cost-efficiency effect of the increased concentration on the ratio of profit to cost versus the market power effect depends upon the pattern of cost function concerned with the purchases of non main material inputs in the processing industries."
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