Imperfect Competition between Milk Manufacturers and Retailers in a Midwestern State in the U.S
AbstractThis manuscript studies the market conduct of the milk manufacturers and retail chains in a Midwestern state in the U.S. Following the menu approach we employ a random coefficient logit demand model to investigate several possible scenarios on the supply side. Demand estimates are obtained using both cross-sectional and time series variation in data. We also allow annual variation in consumer demographics which helps identify the coefficients of interaction between consumer demographics and product characteristics. To further enhance identification power we allow choice set of milk to vary across markets. The results are most supportive of the conjecture that manufacturers behave competitively letting the retailers be the residual claimants. Later they may collect a part or full rents from the retailers through two-part tariffs.
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Bibliographic InfoPaper provided by Southern Agricultural Economics Association in its series 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas with number 98844.
Date of creation: 2011
Date of revision:
Market conduct; random coefficient logit; vertical chain; imperfect competition; Agribusiness; Agricultural and Food Policy; Demand and Price Analysis; Industrial Organization; D43; L13;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-04-16 (Agricultural Economics)
- NEP-ALL-2011-04-16 (All new papers)
- NEP-COM-2011-04-16 (Industrial Competition)
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