Reza Shiva; Mohammad Hossein Rahmati; Ali Ebadi
Abstract
In this paper, we explore the level of monopoly in petrochemical products of Iran and the fluctuations of price using the trading data of these products in Iran Mercantile Exchange (IME). Considering the level of monopoly in this market, we are looking for a solution that lowers the gap between price ...
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In this paper, we explore the level of monopoly in petrochemical products of Iran and the fluctuations of price using the trading data of these products in Iran Mercantile Exchange (IME). Considering the level of monopoly in this market, we are looking for a solution that lowers the gap between price and quantity of current market with those of perfect competition market. Our solution is termed “Guarantee” which is a kind of security that is issued in a quantity that equates supply to market demand in the next period. This creates a two-stage game in which we satisfy the expectations for the demand of second stage in the first stage. We develop a model and show that in this solution, the equilibrium will have lower price and higher quantity in which only the shocks of the second stage are affecting equilibrium price and quantity. Thus, in a situation without an unexpected shock, the price and quantity of market will be equal to those of perfect competition equilibrium. Moreover, we examine the underlying prediction of this new tool by analyzing the performance of an existing security called “Salaf”. These two have the nature of future trading in common and our empirical test show that introducing “Salaf” lowers prices, as predicted by theory.
Mir Taher Poor Partovi; Davod Danesh Jafari; Asadollah Jalalabadi
Volume 9, Issue 35 , January 2010, , Pages 129-154
Abstract
Efficiency, optimal allocation of sources depends on competitive performance of markets. To establish competitive markets, maintain and increase efficiency, it is necessary to exist different issues including complete definition of legal ownership, reduction of conventional and exchange costs, facilitating ...
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Efficiency, optimal allocation of sources depends on competitive performance of markets. To establish competitive markets, maintain and increase efficiency, it is necessary to exist different issues including complete definition of legal ownership, reduction of conventional and exchange costs, facilitating the flow of information among producers and consumers in the markets and also existence of facilitator rules concerning competition and anti-monopoly.
In this research, we have collected the statistics of big industrial working places in 2007 and computed the concentration and monopoly indexes for 130 industries by using Hrefindhal – Hirshman and share of better firms indexes. In addition, we have evaluated the role of private and public companies in increasing and reducing the monopoly, and the effective factors in creating & sustaining of monopolies. Results from the research indicates the considerable concentration in Iran’s including in public & private sectors.
The most important reason to establish monopolies in the country, either in public or private sectors, is creating input obstacles through laws and regulations.
