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Farm Price Estimation When There Is Bargaining: The Case Of Processed Fruit And Vegetables


  • French, Ben C.


Raw product prices for many processed fruits and vegetables are determined in part as an outcome of negotiations between processors and farmer bargaining associations. In such cases, unique market equilibrium solutions may not exist. This study develops a framework for price prediction under bargaining and applies it to the California cling peach industry. The price prediction equation turns out to involve the same variables as would a model specified for perfect competition. Hence a mistaken assumption about the structure of competition may still provide a model that predicts well, provided the structure remains constant.

Suggested Citation

  • French, Ben C., 1987. "Farm Price Estimation When There Is Bargaining: The Case Of Processed Fruit And Vegetables," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 12(01), July.
  • Handle: RePEc:ags:wjagec:32473

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    References listed on IDEAS

    1. Kennedy, Peter, 1983. "Logarithmic Dependent Variables and Prediction Bias," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 45(4), pages 389-392, November.
    2. Salkever, David S., 1976. "The use of dummy variables to compute predictions, prediction errors, and confidence intervals," Journal of Econometrics, Elsevier, vol. 4(4), pages 393-397, November.
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    Cited by:

    1. Folwell, Raymond J. & Mittelhammer, Ronald C. & Wang, Q., 1998. "An Empirical Bargaining Model Of Price Discovery: An Application To The Washington/Oregon Asparagus Industry," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 1(04).
    2. Gabrielyan, Gnel & Marsh, Thomas L., 2012. "Domestic and Export Price Formation of U.S. Hops," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124722, Agricultural and Applied Economics Association.
    3. French, Ben C. & King, Gordon A., 1988. "Dynamic Economic Relationships in the California Cling Peach Industry," Research Reports 251938, University of California, Davis, Giannini Foundation.
    4. French, Ben C. & Willett, Lois Schertz, 1989. "An Econometric Model of the U.S. Asparagus Industry," Research Reports 251937, University of California, Davis, Giannini Foundation.

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    Demand and Price Analysis; Marketing;


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