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Imperfect competition, functional forms, and the size and distribution of research benefits

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  • Alston, Julian M.
  • Sexton, Richard J.
  • Zhang, Mingxia

Abstract

The effects of functional forms for supply and demand on the size and distribution of the returns to research are examined under a range of forms of competition. Under perfect competition, the choice of functional form is relatively unimportant for the estimation of research benefits. Under imperfect competition, the combination of the choice of functional forms for supply and demand and the nature of the research-induced supply shift can have profound implications for the results. Functional form plays a much more important role than in the competitive model. The most important contrast is between the constant elasticity model and the linear model (along with various cases of a generalized linear model). These findings are illustrated using a combination of analytical results and numerical simulations. © 1999 Elsevier Science B.V. All rights reserved.

Suggested Citation

  • Alston, Julian M. & Sexton, Richard J. & Zhang, Mingxia, 1999. "Imperfect competition, functional forms, and the size and distribution of research benefits," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 21(2), October.
  • Handle: RePEc:ags:iaaeaj:175159
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    References listed on IDEAS

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    1. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-122, February.
    2. Pachico, Douglas & Lynam, John K. & Jones, Peter G., 1987. "The distribution of benefits from technical change among classes of consumers and producers: An ex anteanalysis of beans in Brazil," Research Policy, Elsevier, vol. 16(5), pages 279-285, October.
    3. A. M. Azzam & E. Pagoulatos, 1990. "Testing Oligopolistic And Oligopsonistic Behaviour: An Application To The Us Meat-Packing Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(3), pages 362-370.
    4. Wohlgenant, Michael K., 1997. "The nature of the research‐induced supply shift," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 41(3), September.
    5. Mingxia Zhang, 1997. "The Effects of Imperfect Competition on the Size and Distribution of Research Benefits," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1252-1265.
    6. R. K. Lindner & F. G. Jarrett, 1978. "Supply Shifts and the Size of Research Benefits," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(1), pages 48-58.
    7. Shu-Yu Huang & Richard J. Sexton, 1996. "Measuring Returns to an Innovation in an Imperfectly Competitive Market: Application to Mechanical Harvesting of Processing Tomatoes in Taiwan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 558-571.
    8. Stephen F. Hamilton & David Sunding, 1998. "Returns to Public Investments in Agriculture with Imperfect Downstream Competition," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 830-838.
    9. Joyce J. Wann & Sexton Richard J., 1992. "Imperfect Competition in Multiproduct Food Industries with Application to Pear Processing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 980-990.
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    Cited by:

    1. Alston, Julian M. & Wyatt, T. J. & Pardey, Philip G. & Marra, Michele C. & Chan-Kang, Connie, 2000. "A meta-analysis of rates of return to agricultural R & D: ex pede Herculem?," Research reports 113, International Food Policy Research Institute (IFPRI).
    2. James F. Oehmke & Dave D. Weatherspoon & Christopher A. Wolf & Anwar Naseem & Mywish Maredia & Amie Hightower, 2000. "Is agricultural research still a public good?," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 68-81.
    3. Lloyd, Tim A. & Morgan, C. Wyn & McCorriston, Steve & Rayner, Anthony J., 2003. "The Impact Of Food Scares On Price Transmission In Inter-Related Markets," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25904, International Association of Agricultural Economists.
    4. Hareau, Guy Gaston & Mills, Bradford F. & Norton, George W. & Bosch, Darrell J., 2002. "The Economic Impact Of Genetically Modified Organisms In Small Developing Countries," 2002 Annual meeting, July 28-31, Long Beach, CA 19891, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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