This paper extends the conjectural approach in industrial organization to the analysis of imperfections in output and factor markets. Starting from the specification of a production function, the econometric analysis is based on the formulation and estimation of a simultaneous-equation model consisting of production function, first-order conditions associated with factor employment, and two conjectural elasticities to parameterize the industry's oligopoly and oligopsony equilibria. As an example, we provide and application to the U.S. meat-packing industry. Our results suggest that the industry exercises market power in both the output (meat) market and the factor (live animal) market.
Available at: http://works.bepress.com/azzeddine_azzam/19/