IDEAS home Printed from https://ideas.repec.org/a/zbw/espost/286599.html

A line in space: Pricing, location, and market power in agricultural product markets

Author

Listed:
  • Graubner, Marten
  • Salhofer, Klaus
  • Tribl, Christoph

Abstract

Agricultural economists have a long history of emphasizing and analyzing the spatial dimension of agricultural and food markets. Despite a rich body of literature and important contributions to agricultural and spatial economics, one aspect is frequently disregarded: the oligopsonistic nature of agricultural markets due to spatial competition of neighboring buyers of farm products. This review presents the theoretical foundations of spatial pricing, competition, and location in terms of buyer power and discusses concepts that are relevant for agricultural markets. By providing a comprehensive overview of prior work, we highlight the multifaceted areas of applications to agricultural markets. Additionally, we discuss future research avenues for and challenges of the analysis of spatial competition in agricultural economics.

Suggested Citation

  • Graubner, Marten & Salhofer, Klaus & Tribl, Christoph, 2021. "A line in space: Pricing, location, and market power in agricultural product markets," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 13, pages 85-107.
    • Handle: RePEc:zbw:espost:286599
    DOI: 10.1146/annurev-resource-110220-010922
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/286599/1/Graubner_2021_Line_in_space.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.1146/annurev-resource-110220-010922?utm_source=ideas
    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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lederer, Phillip J & Hurter, Arthur P, Jr, 1986. "Competition of Firms: Discriminatory Pricing and Location," Econometrica, Econometric Society, vol. 54(3), pages 623-640, May.
    2. Debashis Pal, 1994. "Cournot Competition and Spatial Agglomeration," Microeconomics 9402002, University Library of Munich, Germany.
    3. Richard J. Sexton & Catherine L. Kling & Hoy F. Carman, 1991. "Market Integration, Efficiency of Arbitrage, and Imperfect Competition: Methodology and Application to U.S. Celery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(3), pages 568-580.
    4. Gronberg, Timothy & Meyer, Jack, 1981. "Competitive Equilibria in Uniform Delivered Pricing Models," American Economic Review, American Economic Association, vol. 71(4), pages 758-763, September.
    5. Paul Krugman, 1998. "Space: The Final Frontier," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 161-174, Spring.
    6. Fousekis, Panos, 2011. "Spatial Price Competition Between Cooperatives Under Hotelling – Smithies Conjectures," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 12(2).
    7. Legrand D F Saint-Cyr & Hugo Storm & Thomas Heckelei & Laurent Piet, 2019. "Heterogeneous impacts of neighbouring farm size on the decision to exit: evidence from Brittany," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(2), pages 237-266.
    8. Mesbah Motamed & Lihong McPhail & Ryan Williams, 2016. "Corn Area Response to Local Ethanol Markets in the United States: A Grid Cell Level Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 726-743.
    9. Jinho Jung & Juan Sesmero & Ralph Siebert, 2020. "Spatial Differentiation and Market Power in Input Procurement: Evidence from a Structural Model of the Corn Market," CESifo Working Paper Series 8088, CESifo.
    10. Tabuchi, Takatoshi, 1994. "Two-stage two-dimensional spatial competition between two firms," Regional Science and Urban Economics, Elsevier, vol. 24(2), pages 207-227, April.
    11. Fousekis, Panos, 2015. "Location equilibria in a mixed duopsony with a cooperative," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(4), October.
    12. Murray Fulton & Konstantinos Giannakas, 2013. "The Future of Agricultural Cooperatives," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 61-91, June.
    13. Panos Fousekis, 2015. "Location equilibria in a mixed duopsony with a cooperative," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(4), pages 518-532, October.
    14. Richard J. Sexton, 1990. "Imperfect Competition in Agricultural Markets and the Role of Cooperatives: A Spatial Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 709-720.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Golombek, Rolf & Hoel, Michael & Kverndokk, Snorre & Ninfole, Stefano & Rosendahl, Knut Einar, 2025. "Competition for carbon storage," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    2. Shu-Yi Chi & Chiao-Chun Chang & Li-Hsien Chien, 2025. "Global Tangerine Trade Market: Revealed Competitiveness and Market Powers," Economies, MDPI, vol. 13(7), pages 1-21, July.
    3. Moschini, GianCarlo & Smith, T. Jake, 2025. "Alternative Marketing Arrangements and Cattle Prices: Insights from Hotelling’s Model," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 360825, Agricultural and Applied Economics Association.
    4. Christine Wieck & Bettina Rudloff & Kristina Mensah & Olayinka Kareem & Jose Ma Luis Montesclaros & David Orden & Niels Søndergaard & Wusheng Yu, 2024. "Geostrategic dimensions of recent food policy decisions," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(4), pages 1605-1626, December.
    5. Koppenberg, Maximilian & Wimmer, Stefan & Hirsch, Stefan, 2025. "Has corporate greed driven inflation in the European Union? An analysis of the food and beverage industry," Economics Letters, Elsevier, vol. 247(C).

    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. Panagiotou, Dimitrios, 2019. "Pricing behavior in a mixed spatial duopsony with an agricultural cooperative under asymmetric information," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 01).
    2. Sesmero Juan, 2018. "Spatial Pricing in Uncontested Procurement Markets: Regulatory Implications," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 16(1), pages 1-14, January.
    3. Panagiotou, Dimitrios & Stavrakoudis, Athanassios, 2018. "Free-on-board and uniform delivered pricing strategies in pure and mixed spatial duopolies: The strategic role of cooperatives," The Journal of Economic Asymmetries, Elsevier, vol. 18(C), pages 1-1.
    4. Grashuis Jasper, 2020. "The Competitive Impact of Cooperatives on the Spot Market: A Spatial Analysis of Iowa Corn Prices," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 18(2), pages 1-11, November.
    5. Graubner, Marten & Sexton, Richard J., 2021. "Spatial competition in agricultural procurement markets," 2021 Annual Meeting, August 1-3, Austin, Texas 313962, Agricultural and Applied Economics Association.
    6. Panos Fousekis, 2016. "Member Coordination Costs and Spatial Entry Deterrence in a Mixed Duopsony with a Cooperative," Spatial Economic Analysis, Taylor & Francis Journals, vol. 11(3), pages 340-354, July.
    7. Murray E. Fulton & Konstantinos Giannakas, 2020. "Corruption in agricultural processing firms: A comparison of cooperatives and investor‐owned firms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(4), pages 445-460, December.
    8. repec:ags:aaea22:335916 is not listed on IDEAS
    9. Irina Baye & Irina Hasnas, 2017. "Consumer flexibility, data quality and location choice," Journal of Economics, Springer, vol. 120(2), pages 135-169, March.
    10. Noriaki Matsushima, 2017. "Expanding distribution channels," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 24(3-4), pages 464-484, October.
    11. Julia HÖHLER & Rainer KÜHL, 2018. "Dimensions Of Member Heterogeneity In Cooperatives And Their Impact On Organization – A Literature Review," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 697-712, December.
    12. Graubner, Marten & Balmann, Alfons & Sexton, Richard J., 2011. "Spatial Pricing and the Location of Processors in Agricultural Markets," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114601, European Association of Agricultural Economists.
    13. Marten Graubner & Richard J. Sexton, 2023. "More competitive than you think? Pricing and location of processing firms in agricultural markets," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 784-808, May.
    14. Marten Graubner, 2018. "Lost in space? The effect of direct payments on land rental prices," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(2), pages 143-171.
    15. Zavelberg, Yvonne & Storm, Hugo, "undated". "Pricing behaviour of cooperatives and investor-owned dairies under spatial competition," Discussion Papers 250230, University of Bonn, Institute for Food and Resource Economics.
    16. Graubner, Marten & Hüttel, Silke, 2024. "Rental and sale prices of agricultural lands under spatial competition," FORLand Working Papers 29 (2024), Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation".
    17. Marten Graubner & Silke Hüttel, 2024. "Rental and sale prices of agricultural lands under spatial competition," Letters in Spatial and Resource Sciences, Springer, vol. 17(1), pages 1-12, December.
    18. Ahmet Candemir & Sabine Duvaleix & Laure Latruffe, 2021. "Agricultural Cooperatives And Farm Sustainability – A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1118-1144, September.
    19. Sylvain Barde, 2007. "Modelling the Folk Theorem: A Spatial Cournot Model with Explicit Increasing Returns to Scale," Studies in Economics 0701, School of Economics, University of Kent.
    20. Kuang-Cheng Wang & Hong-Ren Din & Wen-Jung Liang, 2014. "Spatial competition and flexible manufacturing with spatially discriminatory pricing," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 295-314, August.
    21. Chennak, Ahmed & Giannakas, Konstantinos, 2023. "Licensing in the agri-food system: The role of cooperatives," 2023 Annual Meeting, July 23-25, Washington D.C. 335916, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

    Statistics

    Access and download statistics

    Corrections

    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:zbw:espost:286599. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    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.