The United States In The Global Soybean Market: Where Do We Go From Here?
This study applies the concept of a dynamic dominant-firm oligopoly model to the international soybean market. It has been suggested that the international soybean market should be viewed as an oligopoly among exporting nations. Consistent with Gaskins (1971) dynamic dominant firm model, our results indicate that the current U.S. loan deficiency-payment prices and their predecessors created an environment in which smaller (fringe) exporters could prosper and expand. The reduction of U.S. market share is thus a logical outcome of an "optimally managed decline" a la Gaskins. The study finds U.S. market share to decline at a reducing rate and predicts U.S. market share eventually to stabilize, given the expanding international market for soybeans and products. Recognition of the structure of international soybean market has policy implications for the 2002 farm program as the classic dominant firm model suggests.
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- Gaskins, Darius Jr., 1971. "Dynamic limit pricing: Optimal pricing under threat of entry," Journal of Economic Theory, Elsevier, vol. 3(3), pages 306-322, September.
- Ann M. Carlos & Jamie Brown Kruse, 1996. "The decline of the Royal African Company: fringe firms and the role of the charter," Economic History Review, Economic History Society, vol. 49(2), pages 291-313, 05.
- Carter, Colin A. & MacLaren, Donald, 1994. "Alternative Oligopolistic Structures In International Commodity Markets: Price Or Quantity Competition?," Working Papers 51223, International Agricultural Trade Research Consortium.
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