A Simple Method for Bounding the Elasticity of Growing Demand with Applications to the Analysis of Historic Antitrust Cases

• 成果类型: Article
• 署名作者: Mullin, Wallace P.; Snyder, Christopher M.
• 署名单位: George Washington University; Dartmouth College
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20190012
• 发表日期: 2021
• 页码: 172-217
• 关键词: MARKET-STRUCTURE; INVESTMENT; BEHAVIOR

摘要

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)