Price Transmission, Market Power and Returns to Scale
In this paper, we aim to model the vertical relation between retailers and suppliers in the food industry whereby retailers exercise seller power in their relation with consumers and buyer power in their relation with producers. We then evaluate the degree of price transmission, relative to the perfectly competitive benchmark, from the farm to the retail sector assuming a supply shock. With the view to evaluating the impact of market power's interaction with industry technology on the degree of price transmission, we assume industry technology to be characterised by variable input proportions and non-constant returns to scale. Our model predicts that, relative to that which obtains when markets are perfectly competitive and industry technology is characterised by constant returns to scale, the degree of price transmission when market power and industry technology interact cannot be unambiguously determined.
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- repec:ccp:journl:v:1:y:2001:i:3:p:247-281 is not listed on IDEAS
- repec:ccp:journl:v:54:y:2003:i:1:p:111-125 is not listed on IDEAS
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- Kinnucan, Henry W., 2003.
"Optimal generic advertising in an imperfectly competitive food industry with variable proportions,"
Agricultural Economics of Agricultural Economists,
International Association of Agricultural Economists, vol. 29(2), pages -, October.
- Kinnucan, Henry W., 2003. "Optimal generic advertising in an imperfectly competitive food industry with variable proportions," Agricultural Economics, Blackwell, vol. 29(2), pages 143-158, October.
- Kinnucan, Henry W., 2002. "Optimal Generic Advertising In An Imperfectly Competitive Food Industry With Variable Proportions," 2002 Annual meeting, July 28-31, Long Beach, CA 19775, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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