Pricing behaviour and market power in North American non-ferrous metal industries |
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Authors: | Carmine Nappi |
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Affiliation: | The author is Associate Professor of Mineral Economics, Ecole des Hautes Etudes Commerciales, University of Montreal 5255 avenue Decelles, Montreal, Canada H3T 1V6 |
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Abstract: | The paper considers the degree to which declining market power explains modifications in pricing behaviour observed since the late 1970s in the North American aluminium, copper, lead and zinc industries. More precisely, it relates those changes in pricing policies to the price elasticity of demand facing the dominant strategic group in each industry, the cost elasticity of supply and to the management's ability to coordinate or internalize conduct decisions. The results suggest that the firms in the copper and lead industries do not hold as a group any form of market power. In the case of the aluminum industry, a notable increase in the price elasticity of demand since the end of the 1970s, a sustained decrease in the concentration ratio and a rigid production process are weakening the presence of market power in that industry. The results are inconclusive in the case of the zinc industry since the determinants of market power move in opposite directions. |
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Keywords: | Non-ferrous metals North America Pricing behaviour |
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