IDEAS home Printed from https://ideas.repec.org/p/ags/ugeofs/16699.html
   My bibliography  Save this paper

Wholesaler Markup Decisions Under Demand Uncertainty

Author

Listed:
  • Park, Timothy A.
  • Lohr, Luanne

Abstract

We examine consistency with economic theory of markup decisions for a risk averse firm facing demand uncertainty. We derive testable comparative static results that describe the influence on the markup of expected demand, demand uncertainty, average variable costs and exogenous demand shifters. We test the model using data from the wholesale market for organic lettuce. Our results demonstrated that risk averse wholesalers raise markups as expected demand increases and reduce them as uncertainty increases.

Suggested Citation

  • Park, Timothy A. & Lohr, Luanne, 1996. "Wholesaler Markup Decisions Under Demand Uncertainty," Faculty Series 16699, University of Georgia, Department of Agricultural and Applied Economics.
    • Handle: RePEc:ags:ugeofs:16699
    DOI: 10.22004/ag.econ.16699
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/16699/files/fs9613.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.16699?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. Rosenthal, Robert W., 1993. "Bargaining rules of thumb," Journal of Economic Behavior & Organization, Elsevier, vol. 22(1), pages 15-24, September.
    2. James A. Chalfant & Richard S. Gray & Kenneth J. White, 1991. "Evaluating Prior Beliefs in a Demand System: The Case of Meat Demand in Canada," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 476-490.
    3. Fraser, Robert W, 1985. "Uncertainty and the Theory of Mark-up Pricing," Bulletin of Economic Research, Wiley Blackwell, vol. 37(1), pages 55-64, January.
    4. Jennifer Morgan & Bruce Barbour, 1991. "Marketing organic produce in New Jersey: Obstacles and opportunities," Agribusiness, John Wiley & Sons, Ltd., vol. 7(2), pages 143-163.
    5. Rob Fraser, 1995. "An Analysis Of The Role Of Uncertainty In The Marketing Of Perishable Products," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 233-240, May.
    6. Timothy A. Park & Luanne Lohr, 1996. "Supply and Demand Factors for Organic Produce," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 647-655.
    7. Hey, John D, 1983. "Whither Uncertainty?," Economic Journal, Royal Economic Society, vol. 93(369a), pages 130-139, Supplemen.
    8. Leland, Hayne E, 1972. "Theory of the Firm Facing Uncertain Demand," American Economic Review, American Economic Association, vol. 62(3), pages 278-291, June.
    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. Markus Pasche, 1997. "Markup Pricing and Demand Uncertainty," Working Paper Series B 1997-08, Friedrich Schiller University of Jena, School of of Economics and Business Administration, revised 01 Jun 1998.

    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. Markus Pasche, 1997. "Markup Pricing and Demand Uncertainty," Working Paper Series B 1997-08, Friedrich Schiller University of Jena, School of of Economics and Business Administration, revised 01 Jun 1998.
    2. Huang-Meier, Winifred & Freeman, Mark C., 2015. "Aggregate dividends and consumption smoothing," International Review of Financial Analysis, Elsevier, vol. 42(C), pages 324-335.
    3. Gagnon, Joseph E., 1993. "Exchange rate variability and the level of international trade," Journal of International Economics, Elsevier, vol. 34(3-4), pages 269-287, May.
    4. Hugo Pedro Boff, 2004. "The Supply Of Perishable Goods," Econometric Society 2004 Latin American Meetings 306, Econometric Society.
    5. Griffiths, William E. & Newton, Lisa S. & O'Donnell, Christopher J., 2010. "Predictive densities for models with stochastic regressors and inequality constraints: Forecasting local-area wheat yield," International Journal of Forecasting, Elsevier, vol. 26(2), pages 397-412, April.
    6. Jacek Cukrowski, 1998. "Information-processing, technological progress and regional retail networks dynamics," ERSA conference papers ersa98p71, European Regional Science Association.
    7. Holloway, Garth J. & Hertel, Thomas W., 1991. "Comparing Hypotheses About Competition," Working Papers 225867, University of California, Davis, Department of Agricultural and Resource Economics.
    8. Filippo Bertani & Marco Raberto & Andrea Teglio, 2020. "The productivity and unemployment effects of the digital transformation: an empirical and modelling assessment," Review of Evolutionary Political Economy, Springer, vol. 1(3), pages 329-355, November.
    9. Georges Dionne & Scott Harrington, 2017. "Insurance and Insurance Markets," Working Papers 17-2, HEC Montreal, Canada Research Chair in Risk Management.
    10. Lerohl, Mel L. & Goddard, Ellen W. & Lomeli, Jose L., 2004. "Effects Of Advertising, Food Safety And Health Concerns On Meat Demand In Canada," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(01), pages 1-3, March.
    11. Fraser, R. W., 1985. "Commodity taxes under uncertainty," Journal of Public Economics, Elsevier, vol. 28(1), pages 127-134, October.
    12. Yasunori Ishii, 2000. "International cournol duopoly and R&D subsidies under demand uncertainly," Journal of Economics, Springer, vol. 72(2), pages 203-222, June.
    13. Anastasios Xepapadeas & Hassini Habib, 1995. "An almost ideal demand system with autoregressive disturbances for dairy products in Greece," Applied Economics Letters, Taylor & Francis Journals, vol. 2(6), pages 169-173.
    14. Moschini, G. & Moro, D., 1993. "A Food demand System for Canada," Papers 1-93, Gouvernement du Canada - Agriculture Canada.
    15. Marco de Pinto & Laszlo Goerke, 2022. "Cost uncertainty in an oligopoly with endogenous entry," Bulletin of Economic Research, Wiley Blackwell, vol. 74(4), pages 927-948, October.
    16. Eeckhoudt, Louis & Gollier, Christian & Schlesinger, Harris, 1997. "The no-loss offset provision and the attitude towards risk of a risk-neutral firm," Journal of Public Economics, Elsevier, vol. 65(2), pages 207-217, August.
    17. Hennessy, David A. & Roosen, Jutta, 1999. "Stochastic Pollution, Permits, and Merger Incentives," Journal of Environmental Economics and Management, Elsevier, vol. 37(3), pages 211-232, May.
    18. Gabszewicz, Jean & Tarola, Ornella & Zanaj, Skerdilajda, 2010. "On uncertainty when it affects successive markets," Economics Letters, Elsevier, vol. 106(2), pages 133-136, February.
    19. Lächler, Ulrich, 1983. "On optimal factor proportions in a competitive firm under factor and output price uncertainty," Kiel Working Papers 184, Kiel Institute for the World Economy (IfW Kiel).
    20. Lohr, Luanne & Semali, Adelin, 2000. "Reconciling Attitudes And Behavior In Organic Food Retailing," Faculty Series 16673, University of Georgia, Department of Agricultural and Applied Economics.

    More about this item

    Keywords

    ;
    ;

    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:ags:ugeofs:16699. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/daugaus.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.