MARKET POWER, ECONOMIC EFFICIENCY, AND THE LERNER INDEX

The book uses distance functions, a generalization of the more familiar production function, as the theoretical and empirical tools to construct Lerner indexes of market power in both the input and output markets. The use of distance functions enables us to explicitly account for the effects of firm inefficiency and price markups in the evaluation of market power. The book focusses on the theory and provides a menu of applications to construct measures of firm efficiency and market power in the financial and public sectors.

Contents:
Lerner Indexes: Theoretical Underpinnings:Basic Production Theory (Rolf G Färe, Shawna Grosskopf, and Dimitris Margaritis)Monopoly Power, Output Lerner Indexes (Rolf G Färe, Shawna Grosskopf, and Dimitris Margaritis)Monopsony Power: Input Lerner Indexes (Rolf G Färe, Shawna Grosskopf, and Dimitris Margaritis)Lerner Indexes: Contributed Chapters:Estimating Monopsony Power Using Revenue and Distance Functions (Rolf G Färe, Shawna Grosskopf, Maryam Hasannasab, and Dimitris Margaritis)Estimating Market Power Using Input Distance Functions (Rolf G Färe, Maryam Hasannasab, Giannis Karagiannis, and Dimitris Margaritiss)Public and Private Banks in China: Does Public Ownership Confer Monopoly Power? (Bill Weber and Chen Wu)Estimation and Application of Lerner-Type Indexes for the Public Sector: German Theaters (Kristina Bishop, Rolf G Färe, Shawna Grosskopf, Kathy Hayes, Bill Weber, and Heike Wetzel)
Readership: Advanced undergraduate and graduate students, researchers and practitioners in the fields of production and industrial economics.

Key Features: The recent experience with high inflation rates following persistent bouts of massive expansionary fiscal and monetary policies in response to the pandemic crisis, amplified by supply chain constraints and the Russian invasion of the Ukraine have increased public scrutiny on competition and market pricing The book is essential reading for post graduate students and academics interested in conducting research in production economics and industrial organization with a focus on the measurement of market power