Modelling market power in the Indonesian palm oil industry

A plethora of approaches to modeling market power has been reported in the literature. These can be broadly divided into one-side and two-side behavioral models. This paper uses versions of these models to develop a theoretical framework to test market power in the output and input markets in the Indonesian cooking oil production chain. The dynamic Lerner Index is also proposed as a reinforcing approach to measuring the degree of market power, and its consequential impacts. The implications of the analysis for further research will be explored.