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Information Sharing and Oligopoly in Agricultural Markets: The Role of Cooperative Bargaining Associations


  • Hueth, Brent
  • Marcoul, Philippe


We study incentives for information sharing (about uncertain future demand for final output) among agricultural intermediaries in imperfectly competitive markets for farm output. Information sharing always increases expected grower and consumer surplus, but may reduce expected intermediary profits. Even when expected intermediary profits increase with information sharing, firms face a Prisoner's Dilemma where it is privately rational for each firm to withhold information, given that other firms report truthfully. This equilibrium can be avoided if firms' information reports are verifiable, and if firms commit to an ex ante contract that forces ex post information revelation. We argue that agricultural bargaining represents one means to achieve verifiability and to implement such a contract.

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  • Hueth, Brent & Marcoul, Philippe, 2003. "Information Sharing and Oligopoly in Agricultural Markets: The Role of Cooperative Bargaining Associations," 2003 Annual meeting, July 27-30, Montreal, Canada 22232, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea03:22232

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    References listed on IDEAS

    1. Amir Ziv, 1993. "Information Sharing in Oligopoly: The Truth-Telling Problem," RAND Journal of Economics, The RAND Corporation, vol. 24(3), pages 455-465, Autumn.
    2. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, January.
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