This article proposes a novel procedure to test whether firms compete à la Cournot or perfectly collude when firms' conduct is allowed to be heterogeneous along the conditional distribution of price–cost margins. We apply the procedure to a panel of quarterly data for 177 mobile-voice operators in 45 countries from 1999:1 to 2004:2. Particularly, we find that the hypothesis of perfect collusion can be rejected even for very high-margin operators while the hypothesis that very low-margin operators compete à la Cournot cannot be rejected.
How do mobile-voice operators compete? IVQR estimates / Andini, C; Cabral, R. - In: APPLIED ECONOMICS LETTERS. - ISSN 1350-4851. - 20:(2013), pp. 18-22.
How do mobile-voice operators compete? IVQR estimates
ANDINI C;
2013
Abstract
This article proposes a novel procedure to test whether firms compete à la Cournot or perfectly collude when firms' conduct is allowed to be heterogeneous along the conditional distribution of price–cost margins. We apply the procedure to a panel of quarterly data for 177 mobile-voice operators in 45 countries from 1999:1 to 2004:2. Particularly, we find that the hypothesis of perfect collusion can be rejected even for very high-margin operators while the hypothesis that very low-margin operators compete à la Cournot cannot be rejected.| File | Dimensione | Formato | |
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