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The Lerner Index and Economic Efficiency
University of Maryland, College Park, USA
Oregon State University, Corvallis, USA
CERE, Umeå, Sweden
- 1 University of Maryland, College Park, USA
- 2 Oregon State University, Corvallis, USA
- 3 CERE, Umeå, Sweden
Theoretical Economics Letters·Volume 04 (2014)·Pages 803–805·Published 21 November 2014·DOI10.4236/tel.2014.49101
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Abstract
This short paper brings together two literatures: the first is the Lerner Index as a measure of imperfect competition familiar from industrial organization and the second is a measure of performance from the efficiency literature, namely the Nerlovian indicator. We show how these may be related and the resulting decomposition of the Lerner index which results.
KeywordsLerner IndexNerlovian IndicatorProfit Efficiency
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