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Mixed Markets in the Food Processing Industry

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  • Sorensen, Ann-Christin
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    Abstract

    The food processing industry in Western countries operates in markets that usually are highly concentrated, consisting of a few cooperatives and investor-owned firms. However, in the literature some studies questioned whether the mixed market structure is a stable equilibrium, and suggestions are made that the cooperatives eventually will crowd out all investor-owned firms. To analyse the problem, the family of models of mixed markets is generalized and analysed. It is shown that a mixed market equilibrium may occur under quite general conditions. Also, it is shown that the investor-owned firm may serve as a yardstick of production to the cooperative, helping farmers achieve an increased payoff relative to a situation with a single coop in the market.

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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark with number 24741.

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    Date of creation: 2005
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    Handle: RePEc:ags:eaae05:24741

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    Related research

    Keywords: cooperative; endogenous membership; investor-owned-firm; mixed market; yardstick of production; Agribusiness; L11; L13; P12; P13; Q13;

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    1. Kostas Karantininis & Angelo Zago, 2001. "Endogenous Membership in Mixed Duopsonies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1266-1272.
    2. Svend Albæk & Christian Schultz, 1998. "On the relative advantage of cooperatives," CIE Discussion Papers 1998-02, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
    3. Mats Bergman, 1997. "Antitrust, Marketing Cooperatives, and Market Power," European Journal of Law and Economics, Springer, vol. 4(1), pages 73-92, January.
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    Cited by:
    1. Azzeddine Azzam & Hans Andersson, 2008. "Measuring Price Effects of Concentration in Mixed Oligopoly: An Application to the Swedish Beef-slaughter Industry," Journal of Industry, Competition and Trade, Springer, vol. 8(1), pages 21-31, March.

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