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Search Costs in Identity-Preserved Agricultural Markets

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  • Reimer Jeffrey J

    (Oregon State University)

Abstract

Many industries have "match-maker" institutions that help agents make links to one another by reducing search costs. Such institutions are now emerging in niche farm and food markets. In this study I provide an explanation for such institutions with a theoretical model of a niche market channel involving a small producer, retailer, and variety-loving consumer. I focus on the process by which producers are connected to retailers, and show that search costs between producers and retailers can be an important fixed cost of entry. Reduced search costs result in a larger number of matches, and facilitate the growth of niche market channels selling on the basis of producer identity. I examine the role of consumer preferences, retailer bargaining power, and other key features of these markets.

Suggested Citation

  • Reimer Jeffrey J, 2008. "Search Costs in Identity-Preserved Agricultural Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(1), pages 1-20, October.
  • Handle: RePEc:bpj:bjafio:v:6:y:2008:i:1:n:8
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    References listed on IDEAS

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    1. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, January.
    2. repec:dgr:umamer:2002022 is not listed on IDEAS
    3. Thomas Ziesemer, 2003. "Information and Communication Technology as Technical Change in Matching and Production," Journal of Economics, Springer, vol. 79(3), pages 263-287, July.
    4. Beath,John & Katsoulacos,Yannis, 1991. "The Economic Theory of Product Differentiation," Cambridge Books, Cambridge University Press, number 9780521335263, March.
    5. Rachael E. Goodhue, 1999. "Input Control in Agricultural Production Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 616-620.
    6. B. Wade Brorsen & Jean-Paul Chavas & Warren R. Grant & L. D. Schnake, 1985. "Marketing Margins and Price Uncertainty: The Case of the U.S. Wheat Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 521-528.
    7. repec:dgr:umamer:2001024 is not listed on IDEAS
    8. Jeffrey J. Reimer, 2006. "Vertical Integration in the Pork Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 234-248.
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