Advanced Search
MyIDEAS: Login

Fairtrade Labelling in a Bertrand Competition Model with Monopsony Power

Contents:

Author Info

  • Andreas Graichen

Abstract

This model examines the impact of a fairtrade labelling scheme on global and country-specific welfare in a two-stage north-south trade framework. In the first stage (the producer market) two northern processors buy a commodity from a group of small–scale agricultural producers in the south producing the commodity under perfect competitive market conditions. One of the processors buys a conventional produced commodity and uses its monopsony power to cut the commodity’s price. The second processor is a fairtrade processor, i.e. meets the necessary requirements for being awarded a fairtrade label like paying a minimum price for the commodity to the producers and a license fee to the labelling organization. In the second stage (the consumer market) both firms are processing the commodity and selling their products to the northern consumers. The price is determined by Bertrand compe- tition. Consuming a labelled product is assumed to generate additional utility on behalf of a warm glow effect. I show how changes of certain parameters crucial to the fairtrade system influence welfare in both the northern and the southern country.

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://www.bgpe.de/texte/DP/050_graichen.pdf
File Function: First version, 2008
Download Restriction: no

Bibliographic Info

Paper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number 050.

as in new window
Length: 37 pages
Date of creation: Apr 2008
Date of revision:
Handle: RePEc:bav:wpaper:050_graichen

Contact details of provider:
Web page: http://www.bgpe.de/
More information through EDIRC

Related research

Keywords: Fairtrade; Bertrand Competition; Duopsony; Warm Glow;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

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:bav:wpaper:050_graichen. 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: (Kamila Cygan-Rehm).

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.