Interpreting Markups in Spanish Manufacturing: The Exponential Model

39 Pages Posted: 19 Apr 2011

See all articles by Luis C. Corchón

Luis C. Corchón

Charles III University of Madrid - Department of Economics

Lourdes Moreno

Complutense University of Madrid - Departamento de Fundamentos del Analisis Economico I

Date Written: November 2, 2010

Abstract

In this paper we attempt to rationalize markups in a sample of Spanish manufacturing by assuming a representative consumer, pro…t-maximizing …firms and constant returns to scale. We …find that the standard forms of demand (CES and linear) do not provide a good explanation of markups. In contrast, a model where the representative consumer has an exponential utility function yields results that match data more closely.

Keywords: Markups, Oligopoly, Exponential

JEL Classification: L13, L60

Suggested Citation

Corchón Diaz, Luis Carlos and Moreno, Lourdes, Interpreting Markups in Spanish Manufacturing: The Exponential Model (November 2, 2010). Available at SSRN: https://ssrn.com/abstract=1814011 or http://dx.doi.org/10.2139/ssrn.1814011

Luis Carlos Corchón Diaz (Contact Author)

Charles III University of Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain

Lourdes Moreno

Complutense University of Madrid - Departamento de Fundamentos del Analisis Economico I ( email )

Carretera de Humera s/n
Madrid 28223, Madrid 28223
Spain
+34 91 3942408 (Phone)

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