TELTheoretical Economics Letters2162-2078Scientific Research Publishing10.4236/tel.2014.49101TEL-52091ArticlesBusiness&Economics The Lerner Index and Economic Efficiency .G. Chambers1*R.Färe2*S.Grosskopf3*Oregon State University, Corvallis, USACERE, Umeå, SwedenUniversity of Maryland, College Park, USA* E-mail:rchambers@umd.edu(.GC);rolf.fare@orst.edu(RF);Shawna.grosskopf@orst.edu(SG);21112014040980380511 October 201410 November 2014 2 December 2014© Copyright 2014 by authors and Scientific Research Publishing Inc. 2014This work is licensed under the Creative Commons Attribution International License (CC BY). http://creativecommons.org/licenses/by/4.0/

This short paper brings together two literatures: the first is the Lerner Index as a measure of imperfect competition familiar from industrial organization and the second is a measure of performance from the efficiency literature, namely the Nerlovian indicator. We show how these may be related and the resulting decomposition of the Lerner index which results.

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