The Review of Economics and Statistics Vol. 71 No. 1 1989
Administrative Control, Buyer Concentration, and Price-Cost Margins
Abstract
Steven H. Lustgarten (1975) and others have presented evidence that concentrated buyers lower the price-cost margins of sellers, but theory predicts that buyer concentration is positively correlated with administrative control of transactions. This paper shows that administrative control is responsible for the observed effect of buyer concentration. When a proxy for administrative control is included in Lustgarten's model, buyer concentration becomes insignificant.
- DOI
- 10.2307/1928053
- Volume
- 71
- Issue
- 1
- Pages
- 74
- Sources
- crossref openalex