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Search Costs in Identity-Preserved Agricultural Markets

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Author Info

  • Reimer Jeffrey J

    (Oregon State University)

Abstract

Many industries have "match-maker" institutions that help agents make links to one another by reducing search costs. Such institutions are now emerging in niche farm and food markets. In this study I provide an explanation for such institutions with a theoretical model of a niche market channel involving a small producer, retailer, and variety-loving consumer. I focus on the process by which producers are connected to retailers, and show that search costs between producers and retailers can be an important fixed cost of entry. Reduced search costs result in a larger number of matches, and facilitate the growth of niche market channels selling on the basis of producer identity. I examine the role of consumer preferences, retailer bargaining power, and other key features of these markets.

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File URL: http://www.degruyter.com/view/j/jafio.2008.6.1/jafio.2008.6.1.1230/jafio.2008.6.1.1230.xml?format=INT
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Bibliographic Info

Article provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.

Volume (Year): 6 (2008)
Issue (Month): 1 (October)
Pages: 1-20

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Handle: RePEc:bpj:bjafio:v:6:y:2008:i:1:n:8

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  1. Beath,John & Katsoulacos,Yannis, 1991. "The Economic Theory of Product Differentiation," Cambridge Books, Cambridge University Press, number 9780521335522, December.
  2. Thomas Ziesemer, 2003. "Information and Communication Technology as Technical Change in Matching and Production," Journal of Economics, Springer, vol. 79(3), pages 263-287, 07.
  3. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, January.
  4. Rachael E. Goodhue, 1999. "Input Control in Agricultural Production Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 616-620.
  5. Beath,John & Katsoulacos,Yannis, 1991. "The Economic Theory of Product Differentiation," Cambridge Books, Cambridge University Press, number 9780521335263, December.
  6. Jeffrey J. Reimer, 2006. "Vertical Integration in the Pork Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 234-248.
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