Advanced Search
MyIDEAS: Login to save this paper or follow this series

Optimal Generic Advertising under Bilateral Imperfect Competition between Processors and Retailers

Contents:

Author Info

  • Chung, Chanjin
  • Eom, Young Sook
  • Yang, Byung Woo
  • Han, Sungill

Abstract

The purpose of this paper is to examine the impact of bilateral imperfect competition between processors and retailers and of import supply on optimal advertising intensity, advertising expenditures, and checkoff assessment rates. First, comparative static analyses were conducted on the newly developed optimal advertising intensity formula. Second, to consider the endogenous nature of optimal advertising, a linear market equilibrium model was developed and applied to the U.S. beef industry. Results showed that the full consideration of retailer-processor bilateral market power lowered the optimal values of assessment rates, advertising expenditures, and advertising intensity for the checkoff board while consideration of importers increases the optimal values. The results indicate that ignoring the import sector in optimal generic advertising modeling should underestimate these optimal values, while ignoring the bilateral market power between processors and retailers overestimates the values.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://purl.umn.edu/149582
Download Restriction: no

Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 149582.

as in new window
Length:
Date of creation: 2013
Date of revision:
Handle: RePEc:ags:aaea13:149582

Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Email:
Web page: http://www.aaea.org
More information through EDIRC

Related research

Keywords: bilateral market power; checkoff; import supply; oligopoly; oligopsony; optimal advertising; processor; retailer; Agribusiness; Agricultural and Food Policy; Consumer/Household Economics; Industrial Organization; Marketing; L13; L66; M37;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Sofia Berto Villas-Boas, 2007. "Vertical Relationships between Manufacturers and Retailers: Inference with Limited Data," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 625-652.
  2. Rigoberto Lopez & Azzeddine Azzam & Carmen Lirón-España, 2002. "Market Power and/or Efficiency: A Structural Approach," Review of Industrial Organization, Springer, vol. 20(2), pages 115-126, March.
  3. Greg Shaffer, 1991. "Slotting Allowances and Resale Price Maintenance: A Comparison of Facilitating Practices," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 120-135, Spring.
  4. Chanjin Chung & Emílio Tost�o, 2012. "Effects of horizontal consolidation under bilateral imperfect competition between processors and retailers," Applied Economics, Taylor & Francis Journals, vol. 44(26), pages 3379-3389, September.
  5. Kinnucan, Henry W., 2003. "Optimal generic advertising in an imperfectly competitive food industry with variable proportions," Agricultural Economics, Blackwell, vol. 29(2), pages 143-158, October.
  6. Brester, Gary W & Wohlgenant, Michael K, 1993. "Correcting for Measurement Error in Food Demand Estimation," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 352-56, May.
  7. Griffiths, William E. & Zhao, Xueyan, 1999. "A Unified Approach To Sensitivity Analysis In Equilibrium Displacement Models: Comment," Working Papers 12950, University of New England, School of Economics.
  8. Grossman, Gene M & Shapiro, Carl, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Wiley Blackwell, vol. 51(1), pages 63-81, January.
  9. Mingxia Zhang & Richard J. Sexton, 2002. "Optimal Commodity Promotion when Downstream Markets are Imperfectly Competitive," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 352-365.
  10. Digal, Larry N. & Ahmadi-Esfahani, Fredoun Z., 2002. "Market power analysis in the retail food industry: a survey of methods," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(4), December.
  11. HW Kinnucan & � Myrland, 2000. "Optimal advertising levies with application to the Norway-EU salmon agreement," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(1), pages 39-57, March.
  12. Chanjin Chung & Emílio Tost�o, 2009. "Nonparametric Estimation of Oligopsony Power in First-Price Auction," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 318-333.
  13. George C. Davis & Maria Cristina Espinoza, 1998. "A Unified Approach to Sensitivity Analysis in Equilibrium Displacement Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 868-879.
  14. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-54, July/Aug..
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ags:aaea13:149582. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.