State Trading Enterprises in a Differentiated Product Environment: The Case of Global Malting Barley Markets

This study tested if the exclusive procuring and pricing policies of two state trading enterprises (STEs) in international malting barley markets could be used in a strategic trade context. The research provided four key findings. First, the global malting barley market operated in a quantity-setting oligopolistic structure during the study years. Second, both STEs and other exporting countries were in Cournot competition and thus made available strategic trade possibilities. Third, initial commodity payments were too high to generate a rent-shifting outcome. Fourth, product differentiation was confirmed, which may have dampened the desire/ability of STEs to pursue a rent-shifting objective. Copyright 2006, Oxford University Press.

Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports

The ability of the Canadian Wheat Board (CWB) to price discriminate in wheat exports is examined. The conceptual model shows that the CWB's ability to exploit cost differences in pricing depends on the extent of differentiation between Canadian and U.S. wheat. This model is implemented using monthly confidential price data for exports to four markets from 1982 to 1994. The empirical results support the conclusions that (1) the CWB has market power emerging from product differentiation, (2) the CWB price discriminates across export markets, and (3) Alchian—Allen effects are important in pricing in markets valuing quality such as Japan and the United Kingdom. Copyright 2005, Oxford University Press.