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A line in space: Pricing, location, and market power in agricultural product markets

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  • Graubner, Marten
  • Salhofer, Klaus
  • Tribl, Christoph

Abstract

Agricultural economists have a long history of emphasizing and analyzing the spatial dimension of agricultural and food markets. Despite a rich body of literature and important contributions to agricultural and spatial economics, one aspect is frequently disregarded: the oligopsonistic nature of agricultural markets due to spatial competition of neighboring buyers of farm products. This review presents the theoretical foundations of spatial pricing, competition, and location in terms of buyer power and discusses concepts that are relevant for agricultural markets. By providing a comprehensive overview of prior work, we highlight the multifaceted areas of applications to agricultural markets. Additionally, we discuss future research avenues for and challenges of the analysis of spatial competition in agricultural economics.

Suggested Citation

  • Graubner, Marten & Salhofer, Klaus & Tribl, Christoph, 2021. "A line in space: Pricing, location, and market power in agricultural product markets," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 13, pages 85-107.
    • Handle: RePEc:zbw:espost:286599
    DOI: 10.1146/annurev-resource-110220-010922
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    References listed on IDEAS

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    1. Gronberg, Timothy & Meyer, Jack, 1981. "Competitive Equilibria in Uniform Delivered Pricing Models," American Economic Review, American Economic Association, vol. 71(4), pages 758-763, September.
    2. Fousekis, Panos, 2011. "Spatial Price Competition Between Cooperatives Under Hotelling – Smithies Conjectures," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 12(2).
    3. Fousekis, Panos, 2015. "Location equilibria in a mixed duopsony with a cooperative," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(4), October.
    4. Panos Fousekis, 2015. "Location equilibria in a mixed duopsony with a cooperative," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(4), pages 518-532, October.
    5. Richard J. Sexton, 1990. "Imperfect Competition in Agricultural Markets and the Role of Cooperatives: A Spatial Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 709-720.
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    Cited by:

    1. Rolf Golombek & Michael Hoel & Snorre Kverndokk & Stefano Ninfole & Knut Einar Rosendahl & Michael Olaf Hoel, 2024. "Competition for Carbon Storage," CESifo Working Paper Series 11052, CESifo.

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    More about this item

    Keywords

    agricultural markets; spatial competition; buyer market power; spatial price discrimination; spatial differentiation;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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