NATURAL EXPERIMENTS ON THE RAW-MILK PRICES FOR DISCLOSING MARKET POWER

Abstract

This study measures the degree of oligopoly power of domestic marketers in the Korean white fluid milk market using natural experiments. It extends the number of experiments to eight times covering more than 20 years and considers a dynamic game to check the robustness of the estimates covered by previous studies. The results show that the estimates obtained by the eight experiments and a dynamic game are quite similar to those obtained by a one-shot experiment with a static game. The results show that the Korean white fluid milk market is far from perfect competition.

This study measures the degree of oligopoly power of domestic marketers in the Korean white fluid milk market using natural experiments. It extends the number of experiments to eight times covering more than 20 years and considers a dynamic game to check the robustness of the estimates covered by previous studies. The results show that the estimates obtained by the eight experiments and a dynamic game are quite similar to those obtained by a one-shot experiment with a static game. The results show that the Korean white fluid milk market is far from perfect competition.