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Bargaining powers and market segmentation in freight transport

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  • Michel Mouchart

    (Institut de statistique, Université catholique de Louvain, Louvain-la-Neuve, Belgium)

  • Marie Vandresse

    (Institut de démographie, Université catholique de Louvain, Belgium)

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    Abstract

    The heterogeneity of services in the freight transport market and the presence of imperfect information motivate the development of an empirical model for detecting market imperfection and bargaining powers of the two agents concluding a contract. The fact that agents typically bargain simultaneously on price and attributes leads to models without exogeneity assumption. The model is accordingly based on estimation of the support of the joint distribution of the price and of the attributes of the transport rather than on expectation of the price conditional to the attributes. The model proposes an innovative and integrated approach for measuring market imperfection and bargaining powers. Furthermore, the paper examines the sensitivity of the results to the choice of attributes and, in order to detect potential market segmentation, to selection of the data. The empirical work is based on a new dataset obtained from a survey based on face-to-face interviews, providing data on the price and qualitative attributes of a set of actual contracts negotiated on the Belgian freight market. Copyright © 2007 John Wiley & Sons, Ltd.

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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

    Volume (Year): 22 (2007)
    Issue (Month): 7 ()
    Pages: 1295-1313

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    Handle: RePEc:jae:japmet:v:22:y:2007:i:7:p:1295-1313

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    1. John Rust & Hui Man Chan & George Hall, 2004. "Price Discrimination in the Steel Market," Econometric Society 2004 North American Summer Meetings 245, Econometric Society.
    2. Simar, L. & Wilson, P.W., 2000. "Testing Restrictions in Nonparametric Efficiency Models," Papers 0013, Catholique de Louvain - Institut de statistique.
    3. SIMAR, Léopold & WILSON, Paul, 1995. "Sensitivity Analysis to Efficiency Scores : How to Bootstrap in Nonparametric Frontier Models," CORE Discussion Papers 1995043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. John Rust & George Hall, 2002. "Middlemen versus Market Makers: A Theory of Competitive Exchange," NBER Working Papers 8883, National Bureau of Economic Research, Inc.
    5. Spulber, Daniel F, 1996. "Market Making by Price-Setting Firms," Review of Economic Studies, Wiley Blackwell, vol. 63(4), pages 559-80, October.
    6. Kneip, Alois & Park, Byeong U. & Simar, L opold, 1998. "A Note On The Convergence Of Nonparametric Dea Estimators For Production Efficiency Scores," Econometric Theory, Cambridge University Press, vol. 14(06), pages 783-793, December.
    7. Polachek, Solomon W & Yoon, Bong Joon, 1996. "Panel Estimates of a Two-Tiered Earnings Frontier," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(2), pages 169-78, March-Apr.
    8. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181, October.
    9. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    10. MOUCHART, Michel & VANDRESSE, Marie, 2003. "A measure of market imperfection by frontier analysis," CORE Discussion Papers 2003092, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    Cited by:
    1. François Charles Wolff, 2014. "Lift ticket prices and quality in French ski resorts: Insights from a non-parametric analysis," Working Papers hal-00957842, HAL.
    2. Christian Ben Lakhdar & Hervé Leleu & Nicolas Gérard Vaillant & François-Charles Wolff, 2011. "Efficiency of purchasing and selling agents in markets with quality uncertainty: The case of illicit drug transactions," Working Papers 2011-ECO-02, IESEG School of Management.
    3. WUNSCH, Guillaume & MOUCHART, Michel & RUSSO, Federica, 2012. "Functions and mechanisms in structural-modelling explanations," CORE Discussion Papers 2012056, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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