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Spatial and Temporal Marketing Considerations Under Marketing Loan Programs

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  • Saak, Alexander

Abstract

Marketing assistance loan (MAL) and loan deficiency payment (LDP) programs differ in their treatment of transportation costs. Marketing decisions are analyzed under these programs when producers are differentiated by location with respect to the terminal market. Under certain conditions, a complete characterization of equilibrium is developed. The proposed model broadly fits several "stylized" facts about producer enrollment in these programs. If LDPs are uniform at all locations, LDP programs do not interfere with marketing decisions. MAL programs distort the optimal marketing pattern by providing incentives to store for producers who should be among the first ones to supply the market.

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  • Saak, Alexander, 2004. "Spatial and Temporal Marketing Considerations Under Marketing Loan Programs," Staff General Research Papers Archive 11884, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:11884
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    Cited by:

    1. Susan Athey, 2002. "Monotone Comparative Statics under Uncertainty," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 187-223.

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