Cartel Pricing with Entry: the Experience of the Far West Marketing Order for Spearmint
This paper documents the remarkable experience of the Far West mint producers in the operation of their marketing order. From 1993 to 2002, the marketing order witnessed a dramatic reduction its share of the Scotch spearmint market, as well as a reduction in both its price. We apply a model of a cartel facing a competitive fringe to describe the fall in the marketing order price as a logical consequence of increased world production of spearmint oil. We estimate an econometric model of the marketing order price and find that a 1-percent change in the marketing order's market share corresponds to a 0.8 percent change in the marketing order price.
|Date of creation:||2005|
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- repec:cdl:agrebk:623332 is not listed on IDEAS
- Kwoka, John E, Jr, 1977. "Pricing under Federal Milk Market Regulation," Economic Inquiry, Western Economic Association International, vol. 15(3), pages 367-84, July.
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Claremont Colleges Working Papers
2000-31, Claremont Colleges.
- Filson, Darren, et al, 2001. "Market Power and Cartel Formation: Theory and an Empirical Test," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 465-80, October.
- Lee, Hyunok & Alston, Julian M. & Carman, Hoy F. & Sutton, William R., 1996. "Mandated Marketing Programs For California Commodities," Information Series 11919, University of California, Davis, Giannini Foundation.
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