SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Stiegert, Kyle W.; Wang, Shinn-Shyr.

Buyer Market Power and Vertically Differentiated Retailers

Palavras-chave: International Relations/Trade.

Ano: 2003

URL: http://purl.umn.edu/14589

Wang, Shinn-Shyr; Rojas, Christian; Lavoie, Nathalie.

We consider a model of vertical competition where downstream firms (retailers) purchase an upstream input from a monopolist and are able to differentiate from each other in terms of quality. Our primary focus is to study the effects of introducing a large retailer, such as a Wal-Mart Supercenter, that is able to lower wholesale prices (i.e. buyer market power). We obtain two main results. First, the store with no buyer market power responds to the presence of the large retailer by increasing its quality, a finding that is consistent with recent efforts by traditional retailers to enhance shoppers’ buying experience (i.e. quality). Second, the presence of a large retailer causes consumer welfare to increase. There are, however, two reasons for the increase...

Market Value Maximization through Strategic Delegation

Palavras-chave: Buyer market power; Vertical differentiation; Wal-Mart; Agribusiness; Agricultural and Food Policy; Agricultural Finance; Community/Rural/Urban Development; Crop Production/Industries; Farm Management; Financial Economics; Food Security and Poverty; Industrial Organization; Marketing; D43; L13; L81; M31; Q13.

Ano: 2010

URL: http://purl.umn.edu/57165

Wang, Shinn-Shyr; Stiegert, Kyle W..

In this paper, we develop a model of strategic delegation in which shareholders maintain an objective of market value maximization (MVM) of the firm's assets as measured by a capital asset pricing model (CAPM). Optimal delegation requires that managers maximize a linear combination of expected profits and firm values. An interesting feature of this model is that optimal delegation contracts of the MVM objective mitigate competition relative to standard price and quantity duopoly outcomes. In the MVM model, the delegation encourages managers to control systematic risk, which leads to greater market coordination, higher profits, and higher stock values. Impacts of degree of product differentiation on delegation under price and quantity competitions are also...

Strategic Pricing Behavior under Asset Value Maximization

Palavras-chave: Market Value Maximization; Strategic Delegation; Quantity Competition; Price Competition; Product Differentiation; Marketing.

Ano: 2007

URL: http://purl.umn.edu/9754

Wang, Shinn-Shyr; Stiegert, Kyle W.; Dhar, Tirtha Pratim.

This paper investigates a comprehensive assessment of firm strategic behavior under financial market uncertainty. A general theoretical model of market value maximization (MVM) is constructed using a traditional capital asset pricing format. The model built on the nonlinear Almost Ideal Demand Systems (AIDS) and structural first-order conditions is developed. By full information maximum likelihood (FIML) estimation, the model evaluates pricing strategies in the U.S. margarine and butter retail markets using 4-week interval scanner data from 1998 to 2002. The model of profit maximization is rejected in favor of the MVM structure, and it indicates that financial market uncertainty plays an important role in the pricing behavior in this industry. We estimate...

The Duopolistic Firm with Endogenous Risk Control: Case of Persuasive Advertising and Product Differentiation

Palavras-chave: Market Value Maximization; AIDS; FIML; Model Selection; Risk and Uncertainty.

Ano: 2005

URL: http://purl.umn.edu/19198

Wang, Shinn-Shyr; Stiegert, Kyle W..

In this paper, a two-period game is constructed, where duopoly firms choose advertising strategies in the first period and compete in price or quantity in the second period by maximizing the value of firm equity. Using certainty equivalence, we demonstrate the impacts of uncertainty and modes of competition on duopoly firms' optimal pricing, production, and advertising strategies. Equilibrium price and quantity outcomes emerge as significantly di®erent from the standard industrial organization model of profit maximization. It turns out that the common measurement of market power, the Lerner index, is generally mis-stated. In contrast to the literature, we also find that firms will optimally switch from quantity to price competition either when advertising...

Structural Change in the U.S. Food Manufacturing Sector

Palavras-chave: Risk and Uncertainty.

Ano: 2006

URL: http://purl.umn.edu/12606

Wang, Shinn-Shyr; Stiegert, Kyle W.; Rogers, Richard T..

This study examines the market structure-conduct-performance relationship for 48 four-digit SIC Food and Tobacco Processing Industries during the 1970s, 1980s and 1990s. The simultaneous-equation analyses are used to explore the relationship among price-cost margin (PCM), market concentration, advertising outlay, and various control variables. With an intertemporal setting, our findings provide evidence of structural changes over time in the U.S. food manufacturing sector and support some of the conventional SCP wisdoms, but challenge others.

Local Buyer Market Power and Horizontally Differentiated Manufacturers

Palavras-chave: Agribusiness.

Ano: 2006

URL: http://purl.umn.edu/21045

Wang, Shinn-Shyr; Rojas, Christian; Lavoie, Nathalie.

In this paper we study a farmer-processor relationship, where market power is bidirectional: processors have buyer as well as seller market power. Farmers supply a homogeneous raw input to the processors, which, in turn, process it into a horizontally differentiated product. The analysis shows that the spread between prices that both parties receive can be decomposed into two components: one due to buyer market power in the agricultural input market and one due to seller market power in the differentiated processed market. Farmers receive a decreasing dollar share of the final price as concentration in the processed good market increases. On the other hand, the price spread due to processors' buyer (seller) market power decreases (increases) when farmers'...

Strategic Pricing Behavior under Asset Value Maximization

Palavras-chave: Buyer market power; Horizontal differentiation; Agribusiness; Industrial Organization; Marketing; D43; L13; M31; Q13.

Ano: 2010

URL: http://purl.umn.edu/61990

Wang, Shinn-Shyr; Stiegert, Kyle W.; Dhar, Tirtha Pratim.

In this paper, we develop and estimate a model of strategic firm behavior under financial market uncertainty. The model employs an objective function derived from the capital asset pricing model (CAPM), which draws theoretical linkages between product market uncertainty and financial market returns. An interesting feature of the model is that profit maximization enters as a nested component of the general market value maximization (MVM) model. The model is tested using 4-week interval retail scanner data for margarine and butter from 1998-2002. The traditional profit maximization model is rejected in favor of the proposed MVM structure. Counterfactual simulations point toward significant biases in estimated Lerner indexes when capital market dimensions are...