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Predation and its rate of return : the sugar industry, 1887-1914
- Author / Creator
- Available as
- Online
- Summary
-
Abstract: We study entry into the American sugar refining industry before World War I. We show that the price wars following two major entry episodes were predatory. Our proof is twofold: by direct...
Abstract: We study entry into the American sugar refining industry before World War I. We show that the price wars following two major entry episodes were predatory. Our proof is twofold: by direct comparison of price to marginal cost, and by construction of predicted competitive price cost margins that we show to exceed observed margins. We argue that predation occurred only when the relative cost of it to the dominant firm was small, and that it was most probably used to deter future capacity additions. It was also used to lower the purchase price of preexisting firms after one entry episode.
Details
- Creator
- David Genesove, Wallace P. Mullin
- Format
- Books
- Language
- English
- Publication
-
- Cambridge, Mass. : National Bureau of Economic Research, [1997]
- Physical Details
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- 1 online resource (34, [8] pages) : illustrations
- data file
- OCLC
- ocm70066858
- "May 1997."
- Includes bibliographical references (pages 31-32).
Subjects
- American Sugar Refining Company -- History.
- Sugar -- Prices -- United States -- History -- Econometric models.
- Price fixing -- United States -- History -- Econometric models.
- Sugar industry and trade -- United States -- History -- Econometric models.
- Barriers to entry (Industrial organization) -- United States -- History -- Econometric models.
- Trusts, Industrial -- United States -- History -- Econometric models.
- Rate of return -- United States -- Econometric models.