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- Title
The Evolution of Market Power in the U.S. Automobile Industry.
- Authors
Grieco, Paul L E; Murry, Charles; Yurukoglu, Ali
- Abstract
We construct measures of industry performance and welfare in the U.S. automobile market from 1980 to 2018. We estimate a demand model using product-level data on market shares, prices, and attributes, and consumer-level data on demographics, purchases, and stated second choices. We estimate marginal costs assuming Nash-Bertrand pricing. We relate trends in consumer welfare and markups to trends in market structure and the composition of products. Although real prices rose, we find that markups decreased substantially, and the fraction of total surplus accruing to consumers increased. Consumer welfare increased over time due to improved product quality and improved production technology.
- Subjects
AUTOMOBILE industry; CONSUMERS' surplus; PRODUCT improvement; MARKET power; PRICES; AUTOMOBILE marketing; PRODUCT attributes
- Publication
Quarterly Journal of Economics, 2024, Vol 139, Issue 2, p1201
- ISSN
0033-5533
- Publication type
Article
- DOI
10.1093/qje/qjad047