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

Pasini, Giacomo; Pin, Paolo; Weidenholzer, Simon.

We analyze a model of price competition a la Bertrand in a network environment. Firms only have a limited information on the structure of network: they know the number of potential customers they can attract and the degree distribution of customers. This incomplete information framework stimulates the use of Bayesian-Nash equilibrium. We find that, if there are customers only linked to one firm, but not all of them are, then an equilibrium in randomized strategies fails to exist. Instead, we find a symmetric equilibrium in randomized strategies. Finally, we test our results on US gasoline data. We find empirical evidence consistent with firms playing random strategies.

Buyer Alliances as Countervailing Power in WIC Infant-Formula Auctions

Palavras-chave: Bertrand Competition; Bayesian- Nash Equilibrium; Mobility Index; Demand and Price Analysis; D43; D85; L11.

Ano: 2008

URL: http://purl.umn.edu/6230

Buyer Market Power and Vertically Differentiated Retailers

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

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...

Commodity Price Pass-Through in Differentiated Retail Food Markets

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

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,...

Cooperatives, Regulation and Competition in Norwegian Agriculture

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

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...

Definitions of Biodiversity and Measures of Its Value

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

Ano: 2002

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

Simpson, R. David.

The destruction of natural habitats has prompted concerns about the loss of biological diversity. Regrettably, however, there is no consensus among either biologists or economists on the most meaningful measures of biodiversity. Fundamentally different definitions are useful in asking fundamentally different questions. Considerable attention has been given to the value of diversity in search models. A measure of "aggregate variability" is appropriate to such models. Values derived from search models tend to be well behaved; they exhibit diminishing returns in diversity. In contrast, a definition of diversity as "relative abundance" is more appropriate to more complex objective functions. Values derived in these models are not necessarily well behaved. The...

Do International Roaming Alliances Harm Consumers?

Palavras-chave: Biological diversity; Biodiversity; Diversity index; Abundance; Search; Variability; Consistency; Contingent valuation; Diminishing returns; Increasing returns; Environmental Economics and Policy; D43; D83; Q20.

Ano: 2002

URL: http://purl.umn.edu/10551

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...

Environmental Labeling and Technology Adoption in the Presence of Strategic Interactions

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

Ano: 2009

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

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...

Firm-Level Competition in Price and Variety

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

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

Grain price adjustment asymmetry: the case of cowpea in Ghana

Langyintuo, Augustine S..

Patterns in price adjustment in response to information are important to market practitioners. This study looks at cowpea real wholesale price adjustment patterns in Bolgatanga, Wa, Makola and Techiman markets in Ghana. Using Techiman as the central market, a threshold autoregressive test for asymmetric price adjustment rejected the null hypothesis of symmetric adjustment for only the Bolgatanga-Techiman price series. An autoregressive conditional heteroskedastic regression indicates that wholesalers in Bolgatanga market respond differentially to price signals from Techiman than those in the other two markets. This suggests that policies targeting cowpea traders must recognize the differential responses by wholesalers to information.

Tipo: Journal Article

Palavras-chave: Africa; Ghana; Wholesalers; Market information; Autoregressive conditional heteroskedasticity; Threshold autoregressive; Crop Production/Industries; D82; D43.

Ano: 2010

URL: http://purl.umn.edu/96165

Imperfect Competition between Milk Manufacturers and Retailers in a Midwestern State in the U.S.

Hovhannisyan, Vardges; Stiegert, Kyle W..

This manuscript studies the market conduct of the milk manufacturers and retail chains in a Midwestern state in the U.S. Following the menu approach we employ a random coefficient logit demand model to investigate several possible scenarios on the supply side. Demand estimates are obtained using both cross-sectional and time series variation in data. We also allow annual variation in consumer demographics which helps identify the coefficients of interaction between consumer demographics and product characteristics. To further enhance identification power we allow choice set of milk to vary across markets. The results are most supportive of the conjecture that manufacturers behave competitively letting the retailers be the residual claimants. Later they...

Initial Allocation Effects in Permit Markets with Bertrand Output Oligopoly

Palavras-chave: Market conduct; Random coefficient logit; Vertical chain; Imperfect competition; Agribusiness; Agricultural and Food Policy; Demand and Price Analysis; Industrial Organization; D43; L13.

Ano: 2011

URL: http://purl.umn.edu/98844

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

Local Buyer Market Power and Horizontally Differentiated Manufacturers

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'...

Measuring market power in the Greek food and beverages manufacturing industry

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

Ano: 2010

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

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...

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

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

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

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

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

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

Ano: 2011

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

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.

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

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

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...

Prices vs. Quantities in Monopolistic Competition

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

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.