Oligopsony Distortions and Welfare Implications of Trade

While imperfect competition in the output market has garnered extensive focus in the new trade theory literature, input market imperfection has received considerably less attention. Since market power in input purchase has been growing in recent years, it is worth examining the welfare implications of trade arising from oligopsony power. We develop a model consisting of two final goods, one intermediate good, and two primary factors (capital and labor). One final good and the intermediate good employ primary factors, whereas the other final good uses labor and the intermediate input. All markets operate under perfect competition except for the intermediate input, which is oligopsonistic. Using this model, we show that oligopsony can lead to some anomalies such as an increase in the oligopsony output, reward to the intensive-factor in the oligopsony sector, national welfare, and deterioration of terms of trade, but it always decreases the reward to the intermediate input.Marketing,

Essays on the Organizational Efficiency of a Political Pressure Group

168 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1998.The other objective of this study is to examine the idea of small group dominance in the political arena. This study shows that group size will not play an important role for the group's political effectiveness under complete information but affect the political effectiveness of the group by worsening the informational problem. It indicates that the idea of small group dominance in the political arena is made clearer by introducing the informational problem.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD

Oligopsony Distortions and Welfare Implications of Trade

While imperfect competition in the output market has garnered extensive focus in the new trade theory literature, input market imperfection has received considerably less attention. Since market power in input purchase has been growing in recent years, it is worth examining the welfare implications of trade arising from oligopsony power. We develop a model consisting of two final goods, one intermediate good, and two primary factors (capital and labor). One final good and the intermediate good employ primary factors, whereas the other final good uses labor and the intermediate input. All markets operate under perfect competition except for the intermediate input, which is oligopsonistic. Using this model, we show that oligopsony can lead to some anomalies such as an increase in the oligopsony output, reward to the intensive-factor in the oligopsony sector, national welfare, and deterioration of terms of trade, but it always decreases the reward to the intermediate input

Factor Market Oligopsony and the Production Possibility Frontier

The authors consider a model with two final goods, one intermediate good, and two primary factors. One final good and the intermediate good are produced using primary factors, labor and capital. The other final good is produced using labor and the intermediate input. Producers of the second final good exert oligopsonistic market power on the intermediate input, which captures real world phenomena prevalent in the food processing and other manufacturing industries. If the capital/labor ratio in one final-good sector is in between those of the intermediate-input sector and the combined intermediate-input and the other final-product sectors, and if the oligopsony power is sufficiently large, the model generates results that are not adherent to the standard two-sector Heckscher-Ohlin model. Results that deviate from the H-O model include the relationships between factor prices and commodity prices, the price-output effect, tangency between the price line and the PPF, and the curvature of the PPF. Copyright Blackwell Publishing Ltd 2003.

Oligopsonistic Intermediate Input and Patterns of Trade

We examine the validities of traditional trade theorems and patterns of trade for an economy with an oligopsonistic intermediate input. Specifically, the model consists of two final goods. one intermediate good, and two primary factors. One final good and the intermediate good are produced using primary factors, capital and labor. The second final good is produced using the intermediate good and labor. All markets operate under perfect competition except the intermediate good market, which is oligopsonistic. This model reflects the real world phenomena of oligopsony power excerted by some industries (e.g., the food processing industry) in the intermediate good purchases. Our analysis shows that some of the traditional trade theorems and H.O trade pattern may be overturned if the factor intensity of the competitive sector lies between those of oligopsony and intermediate good sectors. [F12]