Asymmetric Price Transmission, Market Power, and Supply and Demand Curvature
AbstractThis paper studies asymmetries in the magnitude of price transmission from farm to retail markets in a simple framework consisting of three stages of the market chain: farm, wholesale, and retail. The effects of farm supply curvature and buyer power in farm markets, in addition to those of consumer demand curvature and seller power in retail markets, on asymmetries in price transmission are examined. Strict convexity of farm supply and wholesalers/processors' buyer power in farm markets are shown to be a main reason for asymmetries in the magnitude of farm-retail price transmission. The effect of consumer demand curvature and seller power in retail markets on farm-retail price transmission is often indeterminate and tends to be relatively small.
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Bibliographic InfoArticle provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.
Volume (Year): 7 (2009)
Issue (Month): 1 (July)
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Web page: http://www.degruyter.com
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- Octavio Fern?ndez-Amador & Josef Baumgartner & Jes?s Crespo-Cuaresma, 2010.
"Milking The Prices: The Role of Asymmetries in the Price Transmission Mechanism for Milk Products in Austria,"
2010-21, Faculty of Economics and Statistics, University of Innsbruck.
- Octavio Fernández Amador & Josef Baumgartner & Jesús Crespo Cuaresma, . "Milking the Prices: The Role of Asymmetries in the Price Transmission Mechanism for Milk Products in Austria," WIFO Working Papers 378, WIFO.
- Rose FIAMOHE & Bruno HENRY de FRAHAN, 2012. "Transmission Des Prix Et Asymétrie Sur Les Marchés De Produits Vivriers Au Bénin," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 36, pages 205-228.
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