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Measurement of Collusion in Open Ascending Price Auctions in Agricultural Commodity Markets

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  • Dipankar Das
  • Sanjeev Kapoor

Abstract

This paper derives a method of measuring the degree of collusion among the bidders in an open ascending repetitive price auction in agricultural commodity markets in India. This paper first derives the bidders’ behaviour’s theoretical structure and then a measure of collusion formation. Finally, the degree of the cartel has been computed using time series wholesale price data of potato and onion crops. This research’s findings are helpful for the study of the link between the supply of the agriculture commodity and the degree of collusion. Using the proposed method in this research, if the Agricultural Produce Market Committee (APMC) measures cartel for each market and publish periodically, it will help farmers choose the right market to sell the produce. The farmers would select the market where the degree of collusion is relatively lower. Identifying different small cartel groups at different times with respective to the supply of the agriculture commodity would help avoid the incidence of distress selling by farmers, which is the main hindrance in developing the farming community in India. JEL Classifications: C7,D44,L1,L4,Q1

Suggested Citation

  • Dipankar Das & Sanjeev Kapoor, 2023. "Measurement of Collusion in Open Ascending Price Auctions in Agricultural Commodity Markets," Studies in Microeconomics, , vol. 11(3), pages 340-359, December.
    • Handle: RePEc:sae:miceco:v:11:y:2023:i:3:p:340-359
    DOI: 10.1177/23210222211051443
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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