Abstract
This paper conducts an empirical investigation to assess the impact of price uncertainty on industry output concentration. Results show that greater price uncertainty leads to greater output concentration; the result is robust to controls for technological factors, barriers to entry effects and other industry controls. The empirical results are consistent with theory which shows that depending on firms attitudes towards risk, output concentration is likely to be endogenous to price uncertainty. Our empirical finding suggests that examining the magnitude of uncertainty could be a useful additional criteria in antitrust policymaking.
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Ghosal, V. Price uncertainty and output concentration. Rev Ind Organ 10, 749–767 (1995). https://doi.org/10.1007/BF01024306
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DOI: https://doi.org/10.1007/BF01024306