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

Bonanno, Alessandro.

Wal-Mart, the largest retailer worldwide, has been suspected of exercising market power over input providers, both merchandise suppliers and workers. However, in spite of a growing body of literature investigating the beneficial economic impact of the company through its price-lowering effect, research analyzing the company’s economic impact over input suppliers is limited. This paper presents a general framework which can be used to investigate Wal-Mart’s market power over input suppliers, vis-à-vis a variation in input productivity, focusing on homogenous intermediate goods supplied locally. The model is general enough to account for incumbents’ reaction to Wal-Mart’s entry resulting in exit, entry and changes in the production technology. A simplified...

Imperfect competition in the fresh tomato industry

Palavras-chave: Wal-Mart; Oligopsony power; Entry; Wages; Industrial Organization; Labor and Human Capital; L13; L81; J42.

Ano: 2009

URL: http://purl.umn.edu/49599

Hadj Djelloul, Mohammed; Requillart, Vincent; Simioni, Michel.

In this paper, we analyse the market power of the retail industry in the French tomato market. Following the methods developed in the New Empirical Industrial Organization, we develop a structural model of this industry. The analysis is based on detailed data on final consumption and prices at both shipper and consumer levels for two types of tomatoes in France. The structural model is composed of a system of demand equation and supply equation. Supply equation includes a term that represents the market power of the retail sector. We use different models of demand in order to test the robustness of our results. We show that i) elasticity of demand varies during the year ii) the retail sector exercise only a "moderate" market power iii) the estimated...

Footloose Capital, Market Access, and the Geography of Regional State Aid

Palavras-chave: Market power; Imperfect competition; Fresh products; Crop Production/Industries; Demand and Price Analysis; Marketing; L13; Q13; L66; L81.

Ano: 2008

URL: http://purl.umn.edu/6682

Ottaviano, Gianmarco I.P..

The global welfare implications of home market effects in trade models with imperfect competition are little understood. This paper proposes a simple model in which such implications can be easily analyzed. It shows an overall tendency of imperfectly competitive sectors to inefficiently cluster in locations that offer market access advantages. The more so the stronger the market power of firms as well as the intensity of increasing returns to scale and the lower the trade costs. As such features are likely to differ widely across sectors, those results provide theoretical ground to the promotion of regional policies that are also sectorspecific and not only region-specific as currently in the EU.

Retail Competition in the Milk Market in a U.S. Midwestern City

Palavras-chave: Economic integration; Specialization; Home market effect; Regional disparities; Regional policy; International Relations/Trade; Political Economy; F12; L13; R13.

Ano: 2001

URL: http://purl.umn.edu/26387

Hovhannisyan, Vardges; Gould, Brian W..

The main goal of this manuscript is to explore the retailer conduct in the milk market in a U.S. Midwestern city, based upon a structural estimation of consumer milk demand and retailer optimality conditions. To model milk demand we rely upon the Almost Ideal Demand System, while allowing the retailer optimality conditions to cover a range of competitive scenarios from perfect competition to horizontal cartel. We employ a conjectural variation approach in the spirit of Newly Empirical Industrial Organization to study the competitive environment on the retail landscape. We find that the retail market in question is far from being competitive, with the two major retailers being engaged in an oligopolistic competition. Furthermore, the private label milk...

An Analysis of Pricing in the U.S. Cotton Seed Market

Palavras-chave: AIDS demand; Conjectural variation; Market power; Oligopolistic competition.; Demand and Price Analysis; Industrial Organization; D11; D12; D43; L13.

Ano: 2011

URL: http://purl.umn.edu/99281

Shi, Guanming; Stiegert, Kyle W.; Chavas, Jean-Paul.

The purpose of the research in this paper is to investigate the impact of differentiated vertical strategies by agricultural biotechnology firms in the U.S. cottonseed market. The model advances the measurement of industry concentration to consider substitution/complementarity relationships among differentiated products delivered under different vertical structures. We find evidence of sub-additive pricing in the stacking of bundled biotech traits. Prices paid by farmers for cottonseed sold under vertical integration are found to be higher than under licensing. The model is flexible and allows for evaluation of the effects of changing market structures. The parameters on traditional measures of concentration indicate that higher concentration leads to...

Spying in Multi-market Oligopolies

Palavras-chave: Modal Vertical Strategy; Imperfect competition; Cotton seed; Biotechnology; Agricultural and Food Policy; Demand and Price Analysis; Industrial Organization; L13; L4; L65.

Ano: 2009

URL: http://purl.umn.edu/51617

Billand, Pascal; Bravard, Christophe; Chakrabarti, Subhadip; Sarangi, Sudipta.

We consider a multimarket framework where a set of firms compete on two interrelated oligopolistic markets. Prior to competing in these markets, firms can spy on others in order to increase the quality of their product. We characterize the equilibrium espionage networks and networks that maximize social welfare under the most interesting scenario of diseconomies of scope. We find that in some situations firms may refrain from spying even if it is costless. Moreover, even though spying leads to increased product quality, there exist situations where it is detrimental to both consumer welfare and social welfare.

Strategic Investment and Excess Capacity: A Study of the Taiwanese Flour Industry

Palavras-chave: Oligopoly; Multimarket; Networks; Environmental Economics and Policy; C70; L13; L20.

Ano: 2010

URL: http://purl.umn.edu/96632

Dynamic Assessment of Bertrand Oligopsony in the U.S. Cattle Procurement Market

Ma, Tay-Cheng.

The Taiwanese flour industry’s capacity utilization rate has maintained an extremely low level of 40% for more than 20 years. This article sets up a two-stage game model and uses the strategic effect of the firm’s capital investment on its rivals’ outputs to explain the nature of this excess capacity. The model is tested with panel data from the Taiwanese flour industry by using non-linear three-stage least squares. The evidences indicate that a large capacity built in the past could have been used strategically to reduce other firms’ outputs, in the context of a concerted action among the incumbent firms.

Tipo: Journal Article

Palavras-chave: Strategic investment; Two-stage game; Collusion; Conjectural variation; L13.

Ano: 2005

URL: http://purl.umn.edu/37516

Ji, In Bae; Chung, Chanjin.

The new empirical industrial organization approach with the Bertrand model is employed to measure the oligopsony market power in the U.S. cattle procurement market. The assumption of price competition (Bertrand model) based on the nature of cattle production such as cattle cycle and seasonality is used and compared to quantity competition (Cournot model). The empirical results show that the oligopsony market power exists in the U.S. cattle procurement market. The cattle cycle and seasonality affect the oligopsony market power and the cattle cycle causes the change of market power. However, concentration has a negative effect on the oligopsony market power.

Firm-Level Competition in Price and Variety

Palavras-chave: Cattle cycle; Concentration; Market power; NEIO; Oligopsony; Seasonality; Agribusiness; Demand and Price Analysis; Industrial Organization; Livestock Production/Industries; Marketing; Q13; L13; L16.

Ano: 2011

URL: http://purl.umn.edu/103558

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

Buyer Alliances as Countervailing Power in WIC Infant-Formula Auctions

The Impact of Mergers on the Degree of Competition in the Banking Industry

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

Cerasi, Vittoria; Chizzolini, Barbara; Ivaldi, Marc.

This paper analyses the relation between competition and concentration in the banking sector. The empirical answer is given by testing a monopolistic competition model of bank branching behaviour on individual bank data at county level (départements and provinces) in France and Italy. We propose a measure of the degree of competiveness in each local market that is function also of market structure indicators. We then use the econometric model to evaluate the impact of horizontal mergers among incumbent banks on competition and discuss when, depending on the pre-merger structure of the market and geographic distribution of branches, the merger is anti-competitive. The paper has implications for competition policy as it suggests an applied tool to evaluate...

The iPhone goes downstream: mandatory universal distribution

Palavras-chave: Banking Industry; Competition and Market Structure; Merger Policy; Financial Economics; G21; L13; L59.

Ano: 2010

URL: http://purl.umn.edu/92911

Karp, Larry S.; Perloff, Jeffrey M..

Apple’s original decision to market iPhones using a single downstream vendor prompted calls for mandatory universal distribution (MUD), whereby all downstream vendors would sell the iPhone under the same contract terms. The upstream monopoly may want either one or more downstream vendors, and, in either case, consumer welfare may be higher with either one or more firms. If the income elasticity of demand for the new good is greater than the income elasticity of the existing generic good, the MUD requirements leads to a higher equilibrium price for both the new good and the generic, and therefore lowers consumer welfare.

Tipo: Working Paper

Palavras-chave: Vertical restrictions; Mandatory universal distribution; New product oligopoly; Institutional and Behavioral Economics; L12; L13; L42.

Ano: 2011

URL: http://purl.umn.edu/123636

Assessing Competition in the U.S. Beef Packing Industry

Environmental Labeling and Technology Adoption in the Presence of Strategic Interactions

Ward, Clement E..

Tipo: Journal Article

Palavras-chave: Beef; Cattle; Competition; Concentration; Market structure; Meatpacking; Pricing; Agribusiness; Livestock Production/Industries; L13; Q13.

Ano: 2010

URL: http://purl.umn.edu/94758

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...

Food safety and nutritional quality – Firms’ strategies and Public intervention

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

Hammoudi, Abdelhakim; Nguyen, Huong-Hue; Soler, Louis-Georges.

The aim of our paper is to determine the conditions under which firms tend to offer the best nutritional quality of food products, and the public regulation required to obtain this in a context where diet and nutritional status plays an important part in maintaining health and preventing disease, and with increasing pressure for public intervention on food quality in developed countries. To this end, we develop a duopoly model where products can be horizontally (variety) and vertically (quality) differentiated. We analyze the perfect Nash equilibriums in a two period competition game where in the first stage, the firms decide simultaneously on the variety and the quality of the product to be sold and in the second stage, firms set prices. The model...

Mixed Markets in the Food Processing Industry

Palavras-chave: Nutritional product; Health cost; Public regulation; Vertical and horizontal differentiation.; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; Industrial Organization; L13; L15; L51; Q18.

Ano: 2009

URL: http://purl.umn.edu/51749

Sorensen, Ann-Christin.

The food processing industry in Western countries operates in markets that usually are highly concentrated, consisting of a few cooperatives and investor-owned firms. However, in the literature some studies questioned whether the mixed market structure is a stable equilibrium, and suggestions are made that the cooperatives eventually will crowd out all investor-owned firms. To analyse the problem, the family of models of mixed markets is generalized and analysed. It is shown that a mixed market equilibrium may occur under quite general conditions. Also, it is shown that the investor-owned firm may serve as a yardstick of production to the cooperative, helping farmers achieve an increased payoff relative to a situation with a single coop in the market.

An empirical investigation of the welfare effects of banning wholesale price discrimination

Palavras-chave: Cooperative; Endogenous membership; Investor-owned-firm; Mixed market; Yardstick of production; Agribusiness; L11; L13; P12; P13; Q13.

Ano: 2005

URL: http://purl.umn.edu/24741

Villas-Boas, Sofia Berto.

3rd revision CUDARE Working Paper 1017R3 October 2008, 2nd revision CUDARE Working Paper 1017R2 August 2008, 1st revision CUDARE Working Paper 1017R February 2007, CUDARE Working Paper 1017 August 2006.

Tipo: Working Paper

Palavras-chave: Economic theory does not provide sharp predictions on the welfare effects of banning wholesale price discrimination: if downstream costs differences exist then discrimination shifts production inefficiently; Towards high cost retailers; So a ban increases welfare; If differences in price elasticity of demand across retailers exist; Discrimination may increase welfare if more market is covered; So a ban reduces welfare. Using retail prices and quantities of coffee brands sold by German retailers; I estimate a model of demand and supply and separate cost and demand differences. Simulating a ban on wholesale price discrimination has positive welfare effects in this market; And less if downstream cost differences shrink; Or with less competition.; Consumer/Household Economics; L13.

Ano: 2008

URL: http://purl.umn.edu/120491

Market Power and Shadow Prices for Nonrenewable Resources: An Empirical Dynamic Model

Lin, C.-Y. Cynthia; Zhang, Wei.

This paper estimates a dynamic model of the world market for nine nonrenewable resources over the period 1970-2004, and tests whether the countries supplying a nonrenewable resource behaved as price-takers or oligopolists. The model generates estimates of the shadow price of the nine minerals with minimal functional form assumptions. The results show that the countries supplying hard coal, lead, and oil behaved as oligopolists during the study period, while the world market for other nonrenewable resources could be characterized as perfectly competitive. The shadow prices do not increase monotonically, which is evidence for stock effects in extraction costs. The shadow prices of most minerals peaked between 1970 and 1980.

The Social Value of Using Biodiversity in New Pharmaceutical Product Research

Palavras-chave: Nonrenewable resources; Market power; Shadow price; Empirical dynamic model; Resource /Energy Economics and Policy; Q31; L13.

Ano: 2011

URL: http://purl.umn.edu/103397

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...

Is Wal-Mart a Monopsony? Evidence from Local Labor Markets

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

Bonanno, Alessandro; Lopez, Rigoberto A..

This paper measures the degree of monopsony power exerted by Wal-Mart over retail workers using a dominant-firm model and data in the 48 contiguous U.S. states for counties where the company operates, presenting for the first time a measure of the company’s anticompetitive behavior. Empirical results show that Wal-Mart’s monopsony power over workers varies significantly across the country, being higher in non-metro and rural counties, particularly in the south. For instance, Wal-Mart’s buying power index in labor markets in rural southern and central states is estimated to be 5% or higher while the impact on northeastern states’ retail wages is negligible.