This paper investigates the relationship between industrial concentration and price rigidity in the Indonesian food and beverages industry. A Cournot model of firm behavior is used in which prices adjust according to a partial adjustment mechanism. The model is applied to panel data of the Indonesian food and beverages industry over the period 1995–2006. The results suggest that industrial concentration has a positive effect on percentage price changes. Furthermore, the speed of price adjustment is higher when the per unit cost of production rises.
Setiawan, M., Emvalomatis, G., & Oude Lansink, A. (2015). Price rigidity and industrial concentration: evidence from the Indonesian food and beverages industry. Asian Economic Journal, 29(1), 61-72. https://doi.org/10.1111/asej.12047