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http://ssrn.com/abstract=1884993
 
 

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The Lerner Index of Monopoly Power: Origins and Uses


Kenneth G. Elzinga


University of Virginia - Department of Economics

David E. Mills


University of Virginia - Department of Economics

January 18, 2011

American Economic Review: Papers & Proceedings, Vol. 101, No. 3, 2011

Abstract:     
Abba Lerner’s paper in the Review of Economic Studies (1934) is the source of what is now referred to as the Lerner Index of monopoly power. The Lerner Index has become the standard measure of monopoly power and one of the most widely cited indexes in the discipline of economics. This paper traces the origins of the index, sets out its strengths and weaknesses, and examines its role in antitrust enforcement. The Index is a better indicator of a firm’s price-setting discretion than its ability to sustain monopoly prices.

Number of Pages in PDF File: 16

Keywords: Lerner Index, Market Power, Monopoly Power

JEL Classification: L10, L40, B21

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Date posted: July 15, 2011  

Suggested Citation

Elzinga, Kenneth G. and Mills, David E., The Lerner Index of Monopoly Power: Origins and Uses (January 18, 2011). American Economic Review: Papers & Proceedings, Vol. 101, No. 3, 2011. Available at SSRN: http://ssrn.com/abstract=1884993

Contact Information

Kenneth G. Elzinga (Contact Author)
University of Virginia - Department of Economics ( email )
PO Box 400182
Charlottesville, VA 22904-4182
United States
David E. Mills
University of Virginia (UVA) - Department of Economics ( email )
P.O. Box 400182
Charlottesville, VA 22904-4182
United States
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