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Buyer Market Power in UK Food Retailing AgEcon
Lloyd, Tim A.; McCorriston, Steve; Morgan, C. Wyn; Weldegebriel, Habtu T..
The potential existence of buyer market power in UK food retailing has attracted the scrutiny of the UK's anti-trust authorities, culminating in the decision to launch the second of two comprehensive regulatory inquiries in recent years. Throughout, detection of buyer power has been dogged by the paucity of reliable evidence of its existence. In this paper we present a simple theoretical model of oligopsony which delivers quasireduced form retailer-producer pricing equations in which the presence of market power can be detected using readily available market data. Using a cointegrated vector autoregression, we find empirical results that are consistent with the presence of oligopsony power in all six food products investigated.
Tipo: Working or Discussion Paper Palavras-chave: Buyer power; Cointegrated VARs; UK food industry; Agribusiness; Consumer/Household Economics.
Ano: 2007 URL: http://purl.umn.edu/46007
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Market Power in UK Food Retailing: Theory and Evidence from Seven Product Groups AgEcon
Lloyd, Tim A.; McCorriston, Steve; Morgan, C. Wyn; Rayner, Anthony J.; Weldegebriel, Habtu T..
Establishing the presence of market power in food chains has become an increasingly pertinent line of enquiry given the trend towards increasing concentration that has been observed in many parts of the world. This paper presents a theoretical model of price transmission in vertically related markets under imperfect competition. The model delivers a quasi-reduced form representation that is empirically tractable using readily available market data to test for the presence of market power. In particular, we show that the hypothesis of perfect competition can be rejected if shocks to the demand and supply function are significant and correctly signed in price transmission equations. Using a cointegrated vector autoregression, we find empirical results that...
Tipo: Conference Paper or Presentation Palavras-chave: Imperfect competition; Cointegrated VARs; UK food industry; Marketing; D4; L81.
Ano: 2006 URL: http://purl.umn.edu/25712
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