Abstract
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.
| Original language | English |
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| Pages (from-to) | 61-72 |
| Number of pages | 12 |
| Journal | Asian Economic Journal |
| Volume | 29 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Mar 2015 |