Rubens, Michael
Market structure, oligopsony power, and productivity - The American Economic Review - 113(9), Sep, 2023: p.2382-2410
I examine the effects of oligopsony power on allocative efficiency and income redistribution by studying a size regulation in the Chinese tobacco industry that led to ownership consolidation. I show that separate identification of input price markdowns, goods price markups, and productivity is challenging when a subset of inputs is nonsubstitutable, which often holds for materials, and construct and estimate a model to overcome this challenge. I find that the regulation increased input price markdowns by 37 percent on average. This increase in oligopsony power led to a decline in allocative efficiency and redistributed income away from rural households.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20210383
Market structure, oligopsony power, and productivity - The American Economic Review - 113(9), Sep, 2023: p.2382-2410
I examine the effects of oligopsony power on allocative efficiency and income redistribution by studying a size regulation in the Chinese tobacco industry that led to ownership consolidation. I show that separate identification of input price markdowns, goods price markups, and productivity is challenging when a subset of inputs is nonsubstitutable, which often holds for materials, and construct and estimate a model to overcome this challenge. I find that the regulation increased input price markdowns by 37 percent on average. This increase in oligopsony power led to a decline in allocative efficiency and redistributed income away from rural households.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20210383