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

Tennbakk, Berit.

Over production is a persistent and costly problem in Norwegian agriculture. Support to agricultural production implicitly yields incentives to produce too much, i.e., causing market prices to fall below the target level, and thereby increasing the need for subsidies and additional market interventions. In order to restrict supplies, farmers are allowed to coordinate through marketing cooperatives. The paper argues that this coordination is likely to be insufficient in markets where the cooperative competes with an investor-owned wholesaler. Interventions in the market in order to remove excess supplies may induce further incentives to increase production. Levying a tax on all production in order to cover market regulation costs, moves the solution in the...

Retail and Wholesale Market Power in Organic Foods

Palavras-chave: Cooperatives; Regulation; Over production; Duopoly; Agribusiness; Q13; L21; D43.

Ano: 2002

URL: http://purl.umn.edu/24907

Richards, Timothy J.; Acharya, Ram N.; Molina, Ignacio.

The demand for organic fresh fruits and vegetable continues to grow at a rate far higher than the rest of the produce industry. The cost of meeting organic certification standards, however, has meant that supply has been slow to adjust. With limited supply, we hypothesize that organic suppliers enjoy more market power in bargaining over their share of the retail-production cost margin for fresh apples. We test this hypothesis using a random parameters, generalized extreme value demand model (mixed logit) combined with a structural model of retail and wholesale pricing that allows conduct to vary by product attributes (organic or non-organic) and time. We find that organic growers do indeed earn a larger share of the total margin than non-organic...

Measuring market power in the Greek food and beverages manufacturing industry

Palavras-chave: Organics; Market power; Mixed logit; Game theory; Non-linear pricing.; Industrial Organization; C35; D12; D43; L13; L41; Q13..

Ano: 2009

URL: http://purl.umn.edu/49329

Rezitis, Anthony N.; Kalantzi, Maria A..

This paper measures the degree of market power of the Greek food and beverages manufacturing industry over the period 1983–2007 at the three-digit SIC level. The present study also estimates the “deadweight” loss and the reduction of consumers’ income due to the possible existence of market power in the Greek food and beverages manufacturing industry. Based on Bresnahan’s (1989) conjectural variation model, three different approaches are used to investigate competitive conditions of the Greek food and beverages manufacturing industry. The first approach assesses the extent of market power of the whole industry over the period 1983–2007; the second approach tests the degree of market power in each one of the nine sectors of the industry over the whole...

Slotting Allowances and Retail Product Variety under Oligopoly

Palavras-chave: Conjectural variation; Greek food and beverages manufacturing industry; Market power; Welfare losses; Agribusiness; D43; D60; L66; Q10.

Ano: 2011

URL: http://purl.umn.edu/114809

Innes, Robert; Hamilton, Stephen F..

Slotting fees are fixed charges paid by food manufacturers to retailers for access to the retail market. The role of the practice and its effects on market efficiency are highly controversial. To date, the literature has focused on the effect of the practice on retail prices; however, slotting allowances also have the potential to alter the range of products available to consumers. Our analysis reveals that the strategic use of slotting allowances by oligopoly firms leads to a superior allocation of product variety among retailers. Indeed, absent price effects, we show that slotting allowances lead to the socially optimal provision of product variety.

Buyer Market Power and Vertically Differentiated Retailers

Palavras-chave: Slotting fees; Vertical contracts; Monopolization.; Agribusiness; Agricultural and Food Policy; Industrial Organization; Marketing; L13; L14; L42; D43.

Ano: 2010

URL: http://purl.umn.edu/60948

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...

Price Competition with Particle Swarm Optimization: An Agent-Based Artificial Model

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

Zhang, Tong; Brorsen, B. Wade.

This study instructs an artificial price competition market to examine the impact of capacity constraints on the behavior of packers. Results show when there are cattle left for the lowest bidder after all other packers finishing their procurement, the capacity constraints make the price lower than the perfect competition level.

Vertical Channel Analysis of the U.S. Milk Market

Palavras-chave: Fed cattle market; Agent-based model; Particle swarm optimization; Oligopsony; Livestock Production/Industries; Research Methods/ Statistical Methods; D43.

Ano: 2008

URL: http://purl.umn.edu/6780

Hovhannisyan, Vardges; Stiegert, Kyle W..

The objective of the research in this study is to evaluate the pricing and market conduct of milk manufacturers and retailers. Using data from a U.S. Midwestern state, we estimate a random coefficient logit demand model (RCL) to empirically investigate a range of possible scenarios in the milk supply chain. These include vertical leader-follower model with underlying Bertrand-Nash pricing, models allowing for nonlinear pricing contracts, and collusion scenarios at various levels in the supply chain. This study contributes to the literature in the following ways. First, it generalizes the RCL demand model via Box-Cox power transformation. While previous studies rely on ad hoc specified linear indirect utility, this procedure allows data to determine the...

Prices vs. Quantities in Monopolistic Competition

Palavras-chave: Market conduct; Random coefficient logit; Vertical chain; Box-Cox power transformation; Agricultural and Food Policy; Demand and Price Analysis; Industrial Organization; D43; L13.

Ano: 2011

URL: http://purl.umn.edu/103631

Vetter, Henrik.

In perfectly competitive markets taxes and quotas are fully equivalent measures for environmental protection. Based on this regulators' revealed preferences for quotas over that of fees finds its explanation in the procedures and spirits of political decision making. This paper offers another explanation: Ordinary welfare economic considerations make a quota preferable to a tax when regulating polluting firms in monopolistically competitive markets.

Buyer Alliances as Countervailing Power in WIC Infant-Formula Auctions

Palavras-chave: Demand and Price Analysis; D61; D62; D43.

Ano: 2000

URL: http://purl.umn.edu/24203

The Social Value of Using Biodiversity in New Pharmaceutical Product Research

Davis, David E..

State WIC agencies in infant-formula procurement auctions receive lower bids and final prices when they are in buyer’s alliances than when they are unallied. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) uses an auction to procure infant formula. Manufacturers bid on the right to be an agency’s sole supplier by offering a rebate on formula sold through WIC. A theoretical model of rebates shows that bidders may shade their bids and extract surplus from agencies. An empirical estimation shows that bids are lower to alliances suggesting that alliances countervail the power of bidders to extract surplus.

Tipo: Working Paper

Palavras-chave: Auctions; Food assistance; Countervailing power; Buyer concentration; Oligopoly; WIC.; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Industrial Organization; L13; D43; D44; Q18; I18.

Ano: 2011

URL: http://purl.umn.edu/123863

Simpson, R. David; Craft, Amy B..

Biologists and conservation advocates have expressed grave concern over perceived threats to biological diversity. "Biodiversity prospecting" -- the search among naturally occurring organisms for new products of agricultural, industrial, and, particularly, pharmaceutical value -- has been advanced as both a mechanism and a motive for conserving biological diversity. Economists and others have attempted to estimate the value of biodiversity for use in new pharmaceutical project research. Most of these existing approaches are incomplete, however, as they have not considered full social welfare, i.e., both consumer surplus and profit. This paper addresses social welfare by calibrating a model of competition between differentiated products with data from the...

Spatial Competition and Market Power in Banking

Palavras-chave: Biodiversity prospecting; Differentiated products; Pharmaceutical research and development; Biogeographic models; Global warming; Habitat conversion; Health Economics and Policy; D43; L13; Q29.

Ano: 1996

URL: http://purl.umn.edu/10877

Richards, Timothy J.; Acharya, Ram N.; Kagan, Albert.

Banks in non-metropolitan areas compete in a spatially-differentiated environment. Particularly with the advent of electronic banking services, however, there is some question as to how much market power is conferred by spatial separation from rivals. This paper estimates a structural model of the supply and demand of banking services in which pricing power is allowed to depend explicitly on the distance between rival banks. A spatial autoregressive econometric model shows that approximately 38.0% of economic surplus earned by firms in non-metropolitan banking in the upper midwest is due to spatial market power.

Environmental Labeling and Technology Adoption in the Presence of Strategic Interactions

Palavras-chave: Banking; Market power; Non-metropolitan markets; Spatial econometrics; Community/Rural/Urban Development; Financial Economics; C21; D43; G21; L13.

Ano: 2007

URL: http://purl.umn.edu/6566

Konishi, Yoshifumi.

This manuscript analyzes the effect of binary ecolabeling on the strategic competition of Cournot duopolists in environmental technology and the output market. Under binary labeling, firms' abatement technologies are not directly observable by consumers but are certified if they satisfy preset ecological standards. Given this asymmetry, I set up the regulator's problem as one of choosing a technology standard, or "cutoff," in emissions per unit of output, below which all abatement efficiency levels are certified. The regulatory authority faces a trade-off in choosing the socially optimal cutoff: The regulator would like to raise the standard to reduce emissions but needs to lower it in order to induce technology adoption. There are three important...

Nicaragua: Without structural changes there´ll be no sustainable reduction of rural poverty

Palavras-chave: Ecolabeling; Emissions; Product differentiation; Technology adoption; Environmental Economics and Policy; Industrial Organization; D43; L13; Q53; Q58.

Ano: 2007

URL: http://purl.umn.edu/9949

Perez, Francisco Jose.

This is a contribution of the ENVIO-NITLAPAN. The author is member of the scientific council of the RCASAE, and he is a senior researcher of the CAU NITLAPAN.

PRICE REACTIONS AND ORGANIC PRICE PREMIUMS FOR PRIVATE LABEL AND BRANDED MILK

Palavras-chave: Poverty Reduction Strategies; Agriculture and Development; Food Security and Poverty; E24; E23; D43; D72.

Ano: 2011

URL: http://purl.umn.edu/113038

Zhuang, Yan; Dimitri, Carolyn; Jaenicke, Edward C..

Using Nielsen Homescan data set from 52 markets in the United States, this paper assesses the price interactions among the four fluid milk categories (organic private label, organic national brand, non-organic private label and non-organic national brand), how demographic variables and product properties in a market affect milk prices, and the impacts of private label and organic milk market shares on milk prices. We find several types of price competition exist among the four milk categories, including for example symmetric cooperative (non-organic private label vs. non-organic branded milk) and asymmetric dominant-fringe (both organic branded vs. organic private label and non-organic national brand vs. organic national brand. We also find that the...

Initial Allocation Effects in Permit Markets with Bertrand Output Oligopoly

Palavras-chave: Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; Health Economics and Policy; D43; Q13; C30.

Ano: 2010

URL: http://purl.umn.edu/116388

Calford, Evan M.; Heinzel, Christoph; Betz, Regina.

We analyse the efficiency effects of the initial permit allocation given to firms with market power in both permit and output market. We examine two models: a long- run model with endogenous technology and capacity choice, and a short-run model with fixed technology and capacity. In the long run, quantity pre-commitment with Bertrand competition can yield Cournot outcomes also under emissions trading. In the short run, Bertrand output competition reproduces the effects derived under Cournot competition, but displays higher pass-through profits. In a second-best setting of overallocation, a tighter emissions target tends to improve permit-market efficiency in the short run.

Tipo: Journal Article

Palavras-chave: Emissions trading; Initial permit allocation; Bertrand competition; EU ETS; Endogenous technology choice; Kreps and Scheinkman; Resource /Energy Economics and Policy; L13; Q28; D43.

Ano: 2010

URL: http://purl.umn.edu/95066

Do International Roaming Alliances Harm Consumers?

Buhler, Benno.

We develop a model of international roaming in which mobile network operators (MNOs) compete both on the wholesale market to sell roaming services to foreign operators and on the retail market for subscribers. The operators own a network infrastructure only in their home country. To allow their subscribers to place or receive calls abroad, they have to buy roaming services provided by foreign MNOs. We show that in absence of international alliances and capacity restrictions, competition between foreign operators would drive wholesale unit prices down to marginal costs. However, operators prefer to form international alliances in which members mutually provide roaming services at inefficiently high wholesale prices. Alliances serve as a commitment device to...

Firm-Level Competition in Price and Variety

Palavras-chave: International Roaming; Vertical Relations; Regulation; Industrial Organization; D43; L13; L42; L96.

Ano: 2009

URL: http://purl.umn.edu/55292

Richards, Timothy J.; Patterson, Paul M..

Consumer product manufacturers often compete in dynamic, multi-firm oligopolies using multiple strategic tools. While existing empirical models of strategic interaction typically consider only parts of the more general problem, this paper presents a more comprehensive alternative. Marketing decision are dynamically optimal, consistent with optimal consumer choice, and responsive to rival decisions. Using a single-market case study that consists of five years of four-weekly data on ready-to-eat cereal sales, prices, and new brand introductions, we test several hypotheses regarding the nature of strategic interaction among several rival manufacturers. We find that cereal manufacturers price and introduce new brands cooperatively in the same period, but...

Tipo: Journal Article

Palavras-chave: Cereal; Differentiated products; Dynamics; Oligopoly; Product line rivalry; Strategic interaction; Demand and Price Analysis; D43; L13; L66; M31; Q13.

Ano: 2006

URL: http://purl.umn.edu/43788

New Zealand's Pastoral Exports: Can Small Countries Practise Pricing-to-Market?

Tantirigama, Mangalika; Lee, Minsoo; Sanyal, Amal.

Literature presumes that exporters from small countries and particularly of primary products do not practice pricing-to-market (PTM) because of lack of market power. Out paper examines New Zealand’s pastoral exports over 1988-2002 and finds strong evidence of PTM. Evidence rejects the hypothesis that New Zealand is a price taker in these markets. We find incomplete pass-through in sheep meat markets and more than complete pass-through in wool. The degree of PTM is more pronounced in meat and less, but significant, in will. Interesting co-movement in export pricing of New Zealand and Australia and a high degree of PTM are noted when the two counties together dominate a market. Generally we report a smaller PTM when there is a larger promotional...

Tipo: Journal Article

Palavras-chave: Meat and wool exports; Pricing-to-market; Exchange rate pass through; New Zealand economy; International Relations/Trade; F12; F14; D43.

Ano: 2008

URL: http://purl.umn.edu/50010

Commodity Price Pass-Through in Differentiated Retail Food Markets

Richards, Timothy J.; Allender, William J.; Pofahl, Geoffrey M..

Prices for nearly all basic commodity rose at unprecedented rates throughout early 2008, only to fall nearly as fast as financial markets and global economies began to collapse. Rising food prices in 2008 led to concerns that commodity price spikes would lead to more general food inflation, but by early 2009 interest focused more on the seeming inability of food prices to fall back down with commodity prices. This study provides an empirical investigation into the pass-through of commodity prices to retail prices for two different types of food products: potatoes and fluid milk. The results show that pass-through depends on the nature of the food in question, but is generally consistent with theoretical models of pricing by sellers of multiple,...

"Vertical Market Power" as Oxymoron: Getting Convergence Mergers Right

Palavras-chave: Commodity prices; Conduct; Industrial organization; Inflation; Market power; Nested logit; Pass-through; Random parameters model; Consumer/Household Economics; Demand and Price Analysis; Industrial Organization; C35; D12; D43; L13; L41; Q13.

Ano: 2010

URL: http://purl.umn.edu/61187

Brennan, Timothy J..

"Vertical market power" is a contradiction in terms because "market power" is essentially horizontal-that is, it depends on relationships of firms within markets. FERC invokes the term to assess "convergence" mergers between electricity generators and natural gas suppliers. It misapplies Department of Justice guidelines for vertical mergers and fails to identify exceptions to a presumption that market power depends only on competitive conditions at any single stage. A three-stage test can assess whether convergence mergers resemble horizontal ones. The key stage is the third: A convergence merger is more problematic the less vertical it is-that is, if the acquiring generator had no prior dealings with the acquired gas supplier. FERC's analyses in leading...