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Oligopolistic Market Structure in the Japanese Pistachio Import Market

Author

Listed:
  • Asgari Mahdi

    (Department of Agricultural Economics, University of Kentucky, 302 Barnhart Building, Lexington, KY 40546, USA)

  • Saghaian Sayed H.

    (Department of Agricultural Economics, University of Kentucky, 302 Barnhart Building, Lexington, KY 40546, USA)

Abstract

Iran is the major producer of pistachio nuts in the world. Iran dominated the international pistachio export markets until 1982, when a new competitor, the United States, emerged in the international markets. Currently, both Iran and the United States are major pistachio exporters to Japan. In this study, we address the following empirical question: Is the Japanese pistachio import market best characterized by Cournot or Bertrand duopoly competition or some other form of game? We use two historical data sets on pistachio prices and quantities imported by Japan from Iran and the United States and estimate the demand functions for these two main exporters. Considering two different strategic variables, quantity and price, full information maximum likelihood (FIML) resulted in different estimates. We used normalized likelihood ratio statistics for the model comparison. Having proper game-specific nonlinear-equation restrictions enabled us to form six alternative models. The model that best fit the data was the Stackelberg model with US quantity leadership.

Suggested Citation

  • Asgari Mahdi & Saghaian Sayed H., 2013. "Oligopolistic Market Structure in the Japanese Pistachio Import Market," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 87-99, September.
    • Handle: RePEc:bpj:bjafio:v:11:y:2013:i:1:p:13:n:6
    DOI: 10.1515/jafio-2013-0005
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    2. Gasmi, F & Laffont, J J & Vuong, Q, 1992. "Econometric Analysis of Collusive Behavior in a Soft-Drink Market," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(2), pages 277-311, Summer.
    3. Carter, Colin A & MacLaren, Donald, 1997. "Price or Quantity Competition? Oligopolistic Structures in International Commodity Markets," Review of International Economics, Wiley Blackwell, vol. 5(3), pages 373-385, August.
    4. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
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    More about this item

    Keywords

    oligopolistic markets; Cournot model; Bertrand model; Stackelberg model; likelihood ratio tests; pistachio nuts; Japan;
    All these keywords.

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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