454 research outputs found

    DOES PRIVATE LABEL OWNERSHIP AND PRICING STRUCTURE MATTER?

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    This article provides an analysis of the two-stage game between manufacturers and retailers. Response functions showing how prices are set are derived for the case of a manufacturer producing one and multiple goods and for a retailer selling multiple goods. The functions are expressed in terms of elasticities, budget shares, and variable production costs. An application using ready-to-eat cereals is conducted to investigate the pricing structure and ownership of private label cereals.Demand and Price Analysis,

    A STRATEGIC RATIONALE FOR CAPTIVE SUPPLIES

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    Partial backward integration is prevalent in many agricultural and natural resource processing industries. A strategic rationale for partial backward integration is developed for a dominant firm with a competitive fringe purchasing from competitive input suppliers. A partially backward integrated dominant firm potentially can increase profit through production efficiency gains and through a lower price for externally purchasing input. The optimal degree of backward integration results when the dominant firm's profit from exerting monopsony market power in the external spot market equals its profit from producing raw input internally, less the incremental cost of acquiring internal raw input production capacity. Comparative statics results are consistent with recent empirical studies of the beef packing industry.Agribusiness,

    MONOPSONY POWER IN MULTIPLE INPUT MARKETS: A Nonparametric Approach

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    Cigarette manufacturers' monopsony power exertion in procuring domestic and imported tobacco is investigated using nonparametric methods. While it is often assumed that tobacco program rents are captured by growers, results indicate the opposite actually occurs. Cigarette manufacturers appear to exert significant monopsony power in the domestic leaf tobacco market and capture a large portion of program rents. Cigarette manufacturers appear to exert monopsony power of much smaller magnitude in the international leaf tobacco market, but with increasing magnitude in more recent years.market power, tobacco, nonparametric, monopsony, imports., International Relations/Trade, L1,

    A REVIEW OF ALTERNATIVE EXPECTATIONS REGIMES IN COMMODITY MARKETS: SPECIFICATION, ESTIMATION, AND HYPOTHESIS TESTING USING STRUCTURAL MODELS

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    Price expectations play a critical role in commodity markets where producers must make input decisions well before output is realized. This paper brings together alternative expectations regimes, their estimation, and hypothesis tests for use in structural commodity models to determine their use by commodity producers. Extrapolative mechanisms and rational expectations are considered under risk neutrality and risk aversion. The assumptions implicit in the use of aggregate data in these models are made explicit. Structural models using individual survey data are discussed. While Muth's rational expectations hypothesis has found widespread acceptance in the macroeconomic literature, empirical results from industry studies indicate that commodity producers may have heterogeneous price expectations, with no single expectations hypothesis dominating. This is not surprising given that different producers possess different information and have different costs associated with information collection and processing.Demand and Price Analysis,

    A RATIONALE FOR CAPTIVE SUPPLIES

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    Captive supplies, concentration, meat industry, poultry industry, Agribusiness,

    COMMODITY PROGRAM SLIPPAGE RATES FOR CORN AND WHEAT

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    Slippage rates for corn and wheat are estimated using a simultaneous system explaining per-acre yields, input usage, technical change, and levels of participation in government programs. Soybeans are included due to cross-compliance requirements and because they substitute for corn in production. Slippage rates for wheat are in the range of 29-37% and for corn in the range of 48-58%. The results imply that efficient design of commodity programs must account for the slippage of aggregate yields due to changes in land quality and the use of constrained resources over fewer acres.Crop Production/Industries,

    Protection of Intellectual Property while Outsourcing

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    Food and Beverage companies need to share their Intellectual Property (IP) when they outsource production and/or R&D to contract agents. IP sharing can facilitate misappropriation and the contractor may eventually start competing with the client. We design an incentive compatible contract that can protect company IP. A two-pronged strategy is proposed: Companies should share less know-how and give high incentive payments to deter IP misappropriation. Strategies like product differentiation may be highly useful to deter piracy.Intellectual Property Protection, Outsourcing, Product Differentiation, R&D, Agribusiness, Industrial Organization, Risk and Uncertainty, L14, L21, L23, L66, 031, 032, 034,

    Contract Pricing and Packer Competition in Fed Cattle Market

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    We use a game-theoretical framework to analyze the coexistence of spot and contract markets in the cattle industry. A duopsony scenario with two packers and N feeders is used to reflect the reality in the cattle industry. Our main contribution is to incorporate the risk components and the pricing of hedonic attributes of cattle quality. Our preliminary results show that packers have an incentive to transform bidding strategies in spot markets when a series of hedonic characteristics play some significant roles in establishing cattle prices in contract market. That is, we will show that the effectiveness of contract with TOMP clauses on packer competition in a spot market depends on whether there is a correlation between spot price and hedonic characteristics. The results may shed light on understanding potential effects of captive supplies on market power and may aid in the assessment of the policies designed to enhance competition in the cattle industry.Marketing,

    Deregulation of conveyancing markets in England and Wales

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    There has been much concern in recent years with whether the ‘privilege’ of self- regulation accorded to the professions works for or against the public interest (Federal Trade Commission, 1984; Monopolies and Mergers Commission, 1970, 1976a and 1976b; Department of Trade and Industry, 1989; Courts and Legal Services Act, 1990). Ogus (1993) argues that ‘Self-regulation has had a bad press’ and that ‘most of this criticism is well-founded in relation to some forms of self- regulation’. Economists have been, traditionally, highly critical of many aspects of professional self-regulation.2 More recently, there has been a greater awareness of the informational asymmetry inherent in professional markets which demands some protection for the (infrequent) consumer of personal professional services (see, for example, Dingwall and Fenn (1987)). Commentators have identified three principal instruments of such selfregulators which work against the public interest: (1) restrictions on entry; (2) restrictions on fee competition; and (3) restrictions on advertising and other means of promoting a competitive process within the profession.

    ANALYSIS OF THE EFFECTS OF ENVIRONMENTAL REGULATION ON PULP AND PAPER INDUSTRY STRUCTURE

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    Environmental regulations are hypothesized to have an impact on industry structure in manufacturing industries. A nonstationary Markov chain analysis shows that the capital expenditures required to meet environmental regulations is a statistically significant variable explaining increasing concentration of production capacity in the pulp and paper industry.Environmental Economics and Policy, Research Methods/ Statistical Methods,
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