When the number of intermediates in a market is reduced, they become price-makers which allow them to handle production policies through demand control. Seen that one of the most important State missions is insuring market equilibrium, several national legislations throughout the world and international treats establish artificial oligopsonistic as a criminal offence against free competition. Notwithstanding the legal treatment, empirical studies show that oligopsonistic cartels seem to be unsighted by Concurrence Authorities although their noxiousness, the same happens in academy. The hindrance, as aforementioned, is not the lack of legislation but the intricacy to detect counterfeit oligopsonistic cartel in a very accurate manner as legal trials require. Thereunto this research proposes, using estimate and dynamic models, to demonstrate that a specific market is subjected to oligopsonistic control. We reviewed and extended a theoretical method of identification models that are used in specialized literature, expounding versions of both, static and dynamic price elasticity so that we can illustrate the wavy trend in price outliers highlighting how it is rather more precise to identify such market failure than other methods. We dispelled the antithetical possibilities of Giffen Effect over prices, considering extensions to models with Walras’ mixed-strategy equilibrium, substitution effect and the Pareto optimum price which provided us homogeneous insights that can be used in oligopsonistic settings to conduct inference about the outcomes. We found, considering hypothesis of linear errors with less theoretical restrictions, that the cyclic wave in intermediate prices is not fortuitous but a robust denotation of oligopsonistic cartel activity and can support Market Authorities in legal trials.

Oligopsonistic Cartels Recognition: A Parse of Outliers and Wavy Variations in Intermediate Prices Transmission

LIOTTI RAFFAELE, MARIO SAVERI
2017-02-23

Abstract

When the number of intermediates in a market is reduced, they become price-makers which allow them to handle production policies through demand control. Seen that one of the most important State missions is insuring market equilibrium, several national legislations throughout the world and international treats establish artificial oligopsonistic as a criminal offence against free competition. Notwithstanding the legal treatment, empirical studies show that oligopsonistic cartels seem to be unsighted by Concurrence Authorities although their noxiousness, the same happens in academy. The hindrance, as aforementioned, is not the lack of legislation but the intricacy to detect counterfeit oligopsonistic cartel in a very accurate manner as legal trials require. Thereunto this research proposes, using estimate and dynamic models, to demonstrate that a specific market is subjected to oligopsonistic control. We reviewed and extended a theoretical method of identification models that are used in specialized literature, expounding versions of both, static and dynamic price elasticity so that we can illustrate the wavy trend in price outliers highlighting how it is rather more precise to identify such market failure than other methods. We dispelled the antithetical possibilities of Giffen Effect over prices, considering extensions to models with Walras’ mixed-strategy equilibrium, substitution effect and the Pareto optimum price which provided us homogeneous insights that can be used in oligopsonistic settings to conduct inference about the outcomes. We found, considering hypothesis of linear errors with less theoretical restrictions, that the cyclic wave in intermediate prices is not fortuitous but a robust denotation of oligopsonistic cartel activity and can support Market Authorities in legal trials.
23-feb-2017
Oligopsonistic Markets, Economics, Law, Political Economy, Quantitative Methods, Antitrust Polices, Price Variations, Entry Barriers, Cartels, Outliers
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11570/3105528
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