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Buyer Collusion and Efficiency of Government Intervention in Wheat Markets in Northern India: An Asymmetric Structural Auctions Analysis

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Author Info

  • A. Banerji and J.V.Meenakshi

    (Delhi School of Economics)

  • J.V.Meenakshi

    (Delhi School of Economics)

Abstract

This paper uses auction theory to analyze wholesale markets for wheat in Northern India. This approach enables us not only to characterize the market in terms of buyer asymmetries, but also to detect the existence of collusion and to quantify its impact on market prices. We show that buyer asymmetries exacerbate the downward impact of collusion on prices. The paper also demonstrates the use of auction theory to analyze questions of government efficiency. It considers whether the government paid too much for the wheat it procured at the minimum support price, and shows that for our sample it did not. The paper is based on a primary survey of two wholesale markets in North India.

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Bibliographic Info

Paper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number 104.

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Length: 38 pages
Date of creation: Jul 2002
Date of revision:
Handle: RePEc:cde:cdewps:104

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Related research

Keywords: Wheat markets; Structural auctions; Buyer asymmetry; Collusion.;

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Cited by:
  1. Tostao, Emilio & Chung, Chanjin & Brorsen, B. Wade, 2006. "Integrating the Structural Auction Approach and Traditional Measures of Market Power," 2006 Annual meeting, July 23-26, Long Beach, CA 21244, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Reardon, Thomas & Minten, Bart, 2011. "The quiet revolution in India's food supply chains:," IFPRI discussion papers 1115, International Food Policy Research Institute (IFPRI).
  3. Dasgupta, Dipak & Dubey, R.N. & Sathish, R, 2011. "Domestic Wheat Price Formation and Food Inflation in India," MPRA Paper 31564, University Library of Munich, Germany.
  4. Minten, Bart & Vandeplas, Anneleen & Swinnen, Johan F.M., 2011. "The broken broker system?: Transacting on agricultural wholesale markets in India (Uttarakhand)," IFPRI discussion papers 1143, International Food Policy Research Institute (IFPRI).
  5. Ilya Morozov & Elena Podkolzina, 2013. "Collusion detection in procurement auctions," HSE Working papers WP BRP 25/EC/2013, National Research University Higher School of Economics.
  6. Dawe, David C. & Moya, Piedad F. & Casiwan, Cheryll B. & Cabling, Jesusa M., 2008. "Rice marketing systems in the Philippines and Thailand: Do large numbers of competitive traders ensure good performance?," Food Policy, Elsevier, vol. 33(5), pages 455-463, October.
  7. Meenakshi, J.V. & Banerji, A., 2005. "The unsupportable support price: an analysis of collusion and government intervention in paddy auction markets in North India," Journal of Development Economics, Elsevier, vol. 76(2), pages 377-403, April.
  8. Dipak Dasgupta & R N Dubey & R Satish, 2011. "Domestic Wheat Price Formation and Food Inflation in India: International Prices, Domestic Drivers (Stocks, Weather, Public Policy), and the Efficacy of Public Policy Interventions in Wheat Markets," Working Papers id:4291, eSocialSciences.
  9. Minten, Bart & Reardon, Thomas & Vandeplas, Anneleen, 2009. "Linking urban consumers and rural farmers in India: A comparison of traditional and modern food supply chains," IFPRI discussion papers 883, International Food Policy Research Institute (IFPRI).

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