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In the period from 1920 to 1972, the American steel industry consisted of eight large companies and a fringe composed of small domestic producers and foreign firms exporting to the United States. The market structure made it unlikely that the industry behaved in a perfectly competitive fashion. Thus, oligopoly hypotheses on firm behavior such as Nash-Bertrand and Stackelberg leadership seem plausible. This paper estimates a BLP demand model for the industry, and it, then, uses the demand parameters to estimate price equations under the different behavioral assumptions. From the information in this model, tests are made to see which hypothesis is most consistent with the data. Preliminary results indicate that two sequences are the most consistent with data: one with U.S. Steel switching from Stackelberg leadership to Nash-Bertrand behavior in the early 1930s and the other with the switch being made in 1948. Both of these findings give credence to the profit harvesting theory of George Stigler.

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