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

Kostandini, Genti; Mills, Bradford F..

Small research firms developing biotechnology applications often focus on establishing intellectual property rights (IPRs), which can then be sold to more established firms with existing market channels. This paper presents a method for valuing the IPRs for an innovation that lowers product production costs below those associated with the patented process of a monopolist. The application to Glucocerebrosidase enzyme from transgenic tobacco suggests an IPRs value of about $1.75 billion. Despite the innovator’s market power, significant surplus gains also accrue to consumers. Further, U.S. antitrust laws that prohibit IPRs acquisition by the current monopolist increase consumer welfare by almost 50%.

Tipo: Journal Article

Palavras-chave: Biopharmaceuticals; Biopharming; Economic surplus; Imperfect competition; Intellectual property rights; Agribusiness; Demand and Price Analysis; Financial Economics; Marketing; D23; M13; D43; D60.

Ano: 2009

URL: http://purl.umn.edu/56641

A Network Model of Price Dispersion

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.

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

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

Ano: 2008

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

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...

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

Palavras-chave: Vertical mergers; Electricity restructuring; Vertical integration; Convergence; Energy regulation; Resource /Energy Economics and Policy; L40; L94; L22; D43.

Ano: 2001

URL: http://purl.umn.edu/10871

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...

Firm-Level Competition in Price and Variety

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

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

Buyer Alliances as Countervailing Power in WIC Infant-Formula Auctions

Sind die Pachten im Osten zu niedrig oder im Westen zu hoch?

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

Environmental Labeling and Technology Adoption in the Presence of Strategic Interactions

Margarian, Anne.

Zusammenfassung: Die Pachtpreise für Land in den neuen Bundesländern Deutschlands liegen deutlich unter denen im früheren Bundesgebiet. Im vorliegenden Bericht wird diskutiert, in wie weit das durch Skaleneffekte, die Marktmacht großer Betriebe, staatliche Regulationen der Pachtmärkte im Osten und/oder einen verzögerten Agrarstrukturwandel im Westen erklärt werden kann. Das Schätzmodell auf Landkreisebene zeigt einen nicht-linearen Zusammenhang zwischen den Erklärungsgrößen und den Pachtpreisen. Darüber hinaus spielt im Osten die Betriebsstruktur in der Erklärung der Pachtpreise eine untergeordnete Rolle, während die relative Immobilität der Betriebe im Westen zumindest teilweise die "zu hohen" Pachtpreise dort erklärt....

Tipo: Report

Palavras-chave: Bodenmarkt; Agrarstrukturwandel; Marktmacht; Land market; Structural change; Market power; Demand and Price Analysis; Farm Management; Land Economics/Use; Q15; Q31; L11; D43; D51.

Ano: 2008

URL: http://purl.umn.edu/104609

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...

Cooperatives, Regulation and Competition in Norwegian Agriculture

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

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...

The Social Value of Using Biodiversity in New Pharmaceutical Product Research

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

Ano: 2002

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

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...

Prices vs. Quantities in Monopolistic Competition

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

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.

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

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

Ano: 2000

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

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.

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

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

Slotting Allowances and Retail Product Variety under Oligopoly

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.

Spatial Competition and Market Power in Banking

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

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.

Buyer Market Power and Vertically Differentiated Retailers

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

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...

The Impact of Biofuels Policy on Agribusiness Stock Prices

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

Tepe, Fatma Sine; Du, Xiaodong; Hennessy, David A..

Corn markets are important for many industries. These include the seed, fertilizer, meat production/processing and agricultural machinery sectors, all of which are highly concentrated. Oligopoly theory suggests that corn input and field equipment suppliers likely benefit from policies that support corn markets, such as U.S. biofuels policy, while meat companies likely lose. This study investigates the impact of biofuels policy on U.S. agribusiness stock prices. Corn futures prices are found to have a structural change in November 2006, consistent with the expansion of U.S. biofuels policy support. A linear two-factor (S&P500 and corn prices) equilibrium asset pricing model is estimated on two subsamples, one before and one after the estimated change...

Retail and Wholesale Market Power in Organic Foods

Palavras-chave: Biofuels policy; Excess stock returns; GARCH effect; Linear factor model.; Agribusiness; Agricultural and Food Policy; Agricultural Finance; D43; L13; Q14.

Ano: 2010

URL: http://purl.umn.edu/60987

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...

Local Buyer Market Power and Horizontally Differentiated Manufacturers

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

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'...