IDEAS home Printed from
   My bibliography  Save this article

A Flexible Oligopoly-Oligopsony Model for Classroom Simulations and Policy Analyses


  • Saitone Tina L

    (University of California, Davis)

  • Sexton Richard J.

    (University of California, Davis)


We present a flexible model of a vertical market where firms with possible oligopsony power procure a key input, combine it with other inputs purchased competitively, and sell a final product to consumers in a market that may have oligopoly power. The model is capable of depicting all forms of market power ranging from perfect competition to pure monopoly/monopsony. A linear version of the model depicts market equilibrium in terms of only five parameters. The model is useful in teaching undergraduate students about the impacts of market power in classes such as microeconomics, industrial organization, and regulation. An accompanying Excel spreadsheet enables instructors to conduct in-class illustrations and students to utilize the model to perform various problem solving and policy analyses.

Suggested Citation

  • Saitone Tina L & Sexton Richard J., 2009. "A Flexible Oligopoly-Oligopsony Model for Classroom Simulations and Policy Analyses," Journal of Industrial Organization Education, De Gruyter, vol. 4(1), pages 1-16, March.
  • Handle: RePEc:bpj:jioedu:v:4:y:2009:i:1:n:1
    DOI: 10.2202/1935-5041.1025

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item

    References listed on IDEAS

    1. Saitone, Tina L. & Sexton, Richard J. & Sexton, Steven E., 2008. "Market Power in the Corn Sector: How Does It Affect the Impacts of the Ethanol Subsidy?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(2), pages 1-26.
    2. Richard J. Sexton & Ian Sheldon & Steve McCorriston & Humei Wang, 2007. "Agricultural trade liberalization and economic development: the role of downstream market power," Agricultural Economics, International Association of Agricultural Economists, vol. 36(2), pages 253-270, March.
    3. Roger G. Noll, 2005. ""Buyer Power" and Economic Policy," Discussion Papers 04-008, Stanford Institute for Economic Policy Research.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. P. Lelio Iapadre & Giuseppe Pace, 2016. "Trade Intermediaries and the Tariff Pass-through," Journal of Industry, Competition and Trade, Springer, vol. 16(4), pages 441-454, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Thomas Kopp, 2022. "When switching costs cause market power: Rubber processing in Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 53(3), pages 481-495, May.
    3. Soregaroli, Claudio & Sckokai, Paolo, 2011. "Modelling Agricultural Commodity Markets under Imperfect Competition," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116012, European Association of Agricultural Economists.
    4. Freebairn, John, 2018. "Effects of supermarket monopsony pricing on agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(4), October.
    5. David Mills, 2013. "Countervailing Power and Chain Stores," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(3), pages 281-295, May.
    6. Mélanie Jaeck & Robert Lifran & Hubert Stahn, 2012. "Emergence of Organic Farming under Imperfect Competition: Economic Conditions and Incentives," Working Papers hal-02805961, HAL.
    7. Hoque, Mohammad Mainul & Schroeter, John R., 2010. "Agricultural trade liberalization and downstream market power: some extensions," ISU General Staff Papers 201003260700001109, Iowa State University, Department of Economics.
    8. Depetris Chauvin, Nicolas & Porto, Guido G., 2011. "Market Competition in Export Cash Crops and Farm Income," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126159, International Association of Agricultural Economists.
    9. Qiu, Cheng & Colson, Gregory & Wetzstein, Michael, 2014. "An ethanol blend wall shift is prone to increase petroleum gasoline demand," Energy Economics, Elsevier, vol. 44(C), pages 160-165.
    10. Ilaria Fusacchia & Jean Balié & Luca Salvatici, 2022. "The AfCFTA impact on agricultural and food trade: a value added perspective," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(1), pages 237-284.
    11. David E. Mills, 2017. "Buyer‐Induced Exclusive Dealing," Southern Economic Journal, John Wiley & Sons, vol. 84(1), pages 66-81, July.
    12. Just, Richard E. & Rausser, Gordon C., 2007. "General equilibrium in vertical market structures: monopoly, monopsony, predatory behavior and the law," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt8bc979mb, Department of Agricultural & Resource Economics, UC Berkeley.
    13. David Mills, 2007. "Quasi-Partnerships in Distribution," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(3), pages 155-168, November.
    14. Narayan, Seema & Bhattacharya, Poulomi, 2019. "Relative export competitiveness of agricultural commodities and its determinants: Some evidence from India," World Development, Elsevier, vol. 117(C), pages 29-47.
    15. Kaittisak Kumse & Nobuhiro Suzuki & Takeshi Sato, 2020. "Does oligopsony power matter in price support policy design? Empirical evidence from the Thai Jasmine rice market," Agricultural Economics, International Association of Agricultural Economists, vol. 51(3), pages 373-385, May.
    16. Roehlano M. Briones, 2013. "The Structure of Agricultural Trade Industry in Developing Countries," Trade Working Papers 23420, East Asian Bureau of Economic Research.
    17. Dimitrios Panagiotou & Athanassios Stavrakoudis, 2018. "A stochastic frontier estimator of the aggregate degree of market power exerted by the US meat packing industry," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(3), pages 387-401, September.
    18. Poe, Abby & Coatney, Kalyn & Coble, Keith & Freeman, Matt, 2014. "Farm Subsidy Incidence in the Presence of Bertrand Competitors of Complementary Factors of Production: A Theoretical Approach," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162507, Southern Agricultural Economics Association.
    19. Jung, Jinho & Sesmero, Juan Pablo & Balagtas, Joseph V., 2017. "Market Power in Feedstock Procurement and Economic Effects of Corn Ethanol," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258544, Agricultural and Applied Economics Association.
    20. Dries Maes & Mark Vancauteren & Steven Passel, 2019. "Investigating market power in the Belgian pork production chain," Review of Agricultural, Food and Environmental Studies, Springer, vol. 100(1), pages 93-117, December.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:jioedu:v:4:y:2009:i:1:n:1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.