Wholesaler Markup Decisions Under Demand Uncertainty
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.
|Date of creation:||1996|
|Date of revision:|
|Contact details of provider:|| Postal: Conner Hall, Athens, GA 30602|
Phone: (706) 542-2481
Fax: (706) 542-0739
Web page: http://www.caes.uga.edu/departments/agecon/index.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hey, John D, 1983. "Whither Uncertainty?," Economic Journal, Royal Economic Society, vol. 93(369a), pages 130-39, Supplemen.
- 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.
- 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.
- Rosenthal, Robert W., 1993.
"Bargaining rules of thumb,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 22(1), pages 15-24, September.
- Leland, Hayne E, 1972. "Theory of the Firm Facing Uncertain Demand," American Economic Review, American Economic Association, vol. 62(3), pages 278-91, June.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:ags:ugeofs:16699. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.