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A Simple Method for Bounding the Elasticity of Growing Demand with Applications to the Analysis of Historic Antitrust Cases
American Economic Journal: Microeconomics ( IF 2.458 ) Pub Date : 2021-10-28 , DOI: 10.1257/mic.20190012
Wallace P. Mullin 1 , Christopher M. Snyder 2
Affiliation  

We propose a simple method, requiring only minimal data, for bounding demand elasticities in growing, homogeneous-product markets. Since growing demand curves cannot cross, shifts in market equilibrium over time can be used to “funnel” the demand curve into a narrow region, bounding its slope. Our featured application assesses the antitrust remedy in the 1952 DuPont decision, ordering incumbents to license patents for commercial plastics. We bound the demand elasticity significantly below 1 in many post-remedy years, inconsistent with monopoly, supporting the remedy’s effectiveness. A second application investigates whether the 1911 dissolution of American Tobacco fostered competition in the cigarette market. (JEL K21, L24, L65, L66, N41, N42, O34)

中文翻译:

一种限制增长需求弹性的简单方法,适用于历史反垄断案件的分析

我们提出了一种简单的方法,只需要最少的数据,就可以限制不断增长的同质产品市场的需求弹性。由于不断增长的需求曲线不能交叉,市场均衡随时间的变化可用于将需求曲线“汇集”到一个狭窄区域,限制其斜率。我们的特色应用程序评估了 1952 年杜邦公司决定中的反垄断补救措施,命令现有企业许可商业塑料的专利。我们在补救后的许多年将需求弹性限制在 1 以下,这与垄断不一致,支持补救的有效性。第二个申请调查了 1911 年美国烟草公司的解散是否促进了卷烟市场的竞争。(JEL K21, L24, L65, L66, N41, N42, O34)
更新日期:2021-10-28
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