Inventory Constraints in a Dynamic Model of Imperfect Competition: An Application to Beef Packing
AbstractThis paper incorporates inventory dynamics into a standard conjectural variations analysis of market power. Using a model which incorporates closed-loop equilibrium strategies, we show that measures of market power that ignore inventory dynamics are biased. We then apply the model to the beef-packing industry using annual data on cattle stocks, slaughter and prices from 1933-1999. Our estimates suggest that static measures overestimate the amount of market power exerted by beef-packing firms.
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Bibliographic InfoArticle provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.
Volume (Year): 1 (2003)
Issue (Month): 1 (March)
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Web page: http://www.degruyter.com
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- Ani L. Katchova & Ian M. Sheldon & Mario J. Miranda, 2005. "A dynamic model of oligopoly and oligopsony in the U.S. potato-processing industry," Agribusiness, John Wiley & Sons, Ltd., vol. 21(3), pages 409-428.
- Sckokai, Paolo & Soregaroli, Claudio & Moro, Daniele, 2012. "Estimating Market Power By Retailers In A Dynamic Framework: The Case Of The Italian Pdo Cheese Market," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126703, International Association of Agricultural Economists.
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