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Multi-stage Market Power in the Italian Fresh Meat Industry

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  • Moro, Daniele
  • Paolo, Sckokai
  • Veneziani, Mario

Abstract

In line with the New Empirical Industrial Organisation literature, a three-stage modelling of the fresh meat industry in Italy is developed to evaluate the extent of the oligopsonistic behaviour of downstream operators on upstream ones. Moreover, retailers are allowed to exercise oligopolistic market power over consumers purchasing three types of meats assumed substitutable in consumption. Employing a flexible technique for estimating such a model on a uniquely compiled database, evidence that market power is mainly exercised at the retail is unveiled. In fact, roughly 75 – 85% of the price margin at the retail level can be associated with the occurrence of oligopolistic market power. Empirical findings do not support the existence of oligopsonistic power of retailers over processors and of the latter over farmers.

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Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 125065.

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Date of creation: 2012
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Handle: RePEc:ags:aaea12:125065

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Keywords: market power; fresh meat; multistage marketing chain; Italy; Demand and Price Analysis; Industrial Organization; C330; L130; Q110;

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