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Who Invented the Lerner Index? Luigi Amoroso, the Dominant Firm Model, and the Measurement of Market Power.

Authors :
Giocoli, Nicola
Source :
Review of Industrial Organization; Nov2012, Vol. 41 Issue 3, p181-191, 11p
Publication Year :
2012

Abstract

The invention of the price/cost margin (P-MC)/P as an index of market power is usually credited to Lerner (Rev Econ Stud 1(3):157-175, ). Landes and Posner (Harv Law Rev 94(5):937-996, ) is similarly often considered the main reference for the generalized version of the index in the case of a dominant firm that shares the market with price-taking rivals. From the viewpoint of the history of industrial economics both claims are incorrect. It was not Lerner who invented the price/cost margin index and the generalized version was fully derived before WWII. In both cases, priority should be given to Luigi Amoroso, the leading Italian mathematical economist in the interwar decades. In the latter case the names of Heinrich von Stackelberg and George Stigler also deserve credit. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
0889938X
Volume :
41
Issue :
3
Database :
Complementary Index
Journal :
Review of Industrial Organization
Publication Type :
Academic Journal
Accession number :
82143144
Full Text :
https://doi.org/10.1007/s11151-012-9355-7