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Bertrand Competition in Oligopsonistic Market Structures - the Case of the Indonesian Rubber Processing Sector

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  • Kopp, Thomas

Abstract

Violations of the law of one price (LOP) appear to be more the rule than the exception in various markets.This paper models the interface between agricultural supply and processing to explain violations of the LOP due to a fixed cost component of changing buyers. The model is applied to the raw rubber market in the Jambi province in Indonesia and employs a unique dataset of spatially and temporally disaggregated data. Methods to test for and explain violations of the LOP are suggested. An emphasis is set on the implications of aggregation over time.

Suggested Citation

  • Kopp, Thomas, 2017. "Bertrand Competition in Oligopsonistic Market Structures - the Case of the Indonesian Rubber Processing Sector," 57th Annual Conference, Weihenstephan, Germany, September 13-15, 2017 261980, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi17:261980
    DOI: 10.22004/ag.econ.261980
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    Cited by:

    1. Thomas Kopp & Jan Salecker, 2018. "Modelling Social Evolutionary Processes and Peer Effects in Agricultural Trade Networks: the Rubber Value Chain in Indonesia," Papers 1811.11476, arXiv.org.
    2. Kopp, T. & Salecker, J., 2018. "Identifying Influential Traders by Agent Based Modelling," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277130, International Association of Agricultural Economists.

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    Keywords

    Industrial Organization; International Relations/Trade; Marketing;
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