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Revisiting Concentration in Food and Agricultural Supply Chains: The Welfare Implications of Market Power in a Complementary Input Sector

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  • Çakır, Metin
  • Nolan, James

Abstract

We explore how market power in a complementary input sector compares to that in a downstream sector for producer and consumer welfare. We develop a model of a homogeneous product market encompassing bilateral and complementary relationships. Our main finding is that market power exercised by the supplier of a complementary input generates greater negative welfare effects than the same level of market power exercised by downstream firms. We provide a discussion of the implications of the results for policy in the context of current problems in the Canadian grain-handling and transportation system.

Suggested Citation

  • Çakır, Metin & Nolan, James, 2015. "Revisiting Concentration in Food and Agricultural Supply Chains: The Welfare Implications of Market Power in a Complementary Input Sector," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(2), pages 1-17, May.
  • Handle: RePEc:ags:jlaare:206593
    DOI: 10.22004/ag.econ.206593
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    References listed on IDEAS

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    Cited by:

    1. Serfas, D., 2018. "an ex-post econometric analysis of the abolishment of the canadian wheat board," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277286, International Association of Agricultural Economists.

    More about this item

    Keywords

    Food Consumption/Nutrition/Food Safety; Marketing;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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