The Supply Of Perishable Goods
AbstractThis paper models the supply of perishable goods within a randon framework. Perishability affects a large group of goods usually traded in the economy such as fruits and vegetables, newspapers, medicine drugs, a.s.o.. Surprisingly, one cannot find in the literature a decision model for suppliers that takes into account the specificity of this kind of goods. The suppliers guess their demand by choosing a probability density function, one at each price level. Then they choose optimal supply functions maximizing their expected profits. Examples of the optimal solution are given for some known demand distribution functions like Pareto and Weibull. The autarchic model is then extended to include nonprice competition among the sellers. Each seller chooses the supply curve that maximizes his expected profit, conditioned by the event that competitorsâ€™ markets are in equilibrium. The supply of rivals affect the sales for certain to loyal clients, but not the random sales. The autarchic model is then used to analyze the green-pepper market in Rio de Janeiro(1994/7-2000/11). The results give consistency to the rational hypothesis of the model
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Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society 2004 Latin American Meetings with number 306.
Date of creation: 11 Aug 2004
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goods; price-elasticity; Lerner index; Nash equilibrium.;
Find related papers by JEL classification:
- Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
- C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-30 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Klemperer, Paul D & Meyer, Margaret A, 1989. "Supply Function Equilibria in Oligopoly under Uncertainty," Econometrica, Econometric Society, vol. 57(6), pages 1243-77, November.
- Rob Fraser, 1995. "An Analysis Of The Role Of Uncertainty In The Marketing Of Perishable Products," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 233-240.
- Richard J. Sexton & Mingxia Zhang, 1996. "A Model of Price Determination for Fresh Produce with Application to California Iceberg Lettuce," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 924-934.
- Malaga, Jaime E. & Williams, Gary W. & Fuller, Stephen W., 2001. "US-Mexico fresh vegetable trade: the effects of trade liberalization and economic growth," Agricultural Economics, Blackwell, vol. 26(1), pages 45-55, October.
- Grossman, Sanford J, 1981. "Nash Equilibrium and the Industrial Organization of Markets with Large Fixed Costs," Econometrica, Econometric Society, vol. 49(5), pages 1149-72, September.
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