A Dynamic Analysis Of Us Export Wheat Pricing And Market Shares
AbstractThe economics of a higher loan rate to support US wheat prices is analysed. Utilising optimal control theory, a dynamic wheat trade model is developed. The basic premise underlying the model is that the United States finds itself having transient monopoly power in the wheat market. An expression for the optimal pricing policy which maximises the present value of expected profits over the indefinite future is derived. Results from both the theoretical and empirical models demonstrate that the US wheat pricing strategy depends on its costs relative to competitors' costs, the discount rate and the competitors' response function. The main policy implication of the analysis is for the dominant wheat exporting country constantly to seek to lower costs relative to competitors and to maintain a price exceeding unit cost without encouraging competitors' expansion.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural Economics.
Volume (Year): 31 (1987)
Issue (Month): 03 (December)
Contact details of provider:
Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200
Phone: 0409 032 338
Web page: http://www.aares.info/
More information through EDIRC
Demand and Price Analysis;
Other versions of this item:
- Fredoun Z. Ahmadi‐Esfahani & Colin A. Carter, 1987. "A Dynamic Analysis Of Us Export Wheat Pricing And Market Shares," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 31(3), pages 191-203, December.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mitchell, Donald O & Duncan, Ronald C, 1987. "Market Behavior of Grains Exporters," World Bank Research Observer, World Bank Group, vol. 2(1), pages 3-21, January.
- Gaskins, Darius Jr., 1971. "Dynamic limit pricing: Optimal pricing under threat of entry," Journal of Economic Theory, Elsevier, vol. 3(3), pages 306-322, September.
- Dunmore, John C., 1985. "International Trade as a Source of Risk and Uncertainty," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 3(1), February.
- Ahmadi-Esfahani, Fredoun Z. & Jensen, Paul H., 1994. "Impact of the US-EC price war on major wheat exporters' shares of the Chinese market," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 10(1), January.
- Ryan, Timothy J., 1994. "Marketing Australia's Wheat Crop: The Way Ahead," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(01), April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.