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Location equilibria in a mixed duopsony with a cooperative

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  • Fousekis, Panos

Abstract

This work analyses a two-stage price–location game between a profit maximising firm and a primary producers’ cooperative. According to the results, the location equilibria are not fixed but depend on the intrinsic competitiveness of the spatial market. As the intrinsic competitiveness rises, the cooperative tends to be located closer to the middle point of the market. The limited differentiation in location entails an efficiency loss which is nevertheless smaller than that associated with the competition of two profit maximising firms (pure duopsony) on exactly the same spatial market. The superiority of a mixed duopsony lies in the fact that the resulting equilibrium locations entail lower total transportation cost relative to those of a pure duopsony.

Suggested Citation

  • Fousekis, Panos, 2015. "Location equilibria in a mixed duopsony with a cooperative," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(4), October.
    • Handle: RePEc:ags:aareaj:283218
    DOI: 10.22004/ag.econ.283218
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    Cited by:

    1. Marten Graubner & Klaus Salhofer & Christoph Tribl, 2021. "A Line in Space: Pricing, Location, and Market Power in Agricultural Product Markets," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 85-107, October.
    2. Graubner, Marten & Sexton, Richard J., 2021. "Spatial competition in agricultural procurement markets," 2021 Annual Meeting, August 1-3, Austin, Texas 313962, Agricultural and Applied Economics Association.
    3. Grashuis Jasper, 2020. "The Competitive Impact of Cooperatives on the Spot Market: A Spatial Analysis of Iowa Corn Prices," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 18(2), pages 1-11, November.
    4. Panos Fousekis, 2016. "Member Coordination Costs and Spatial Entry Deterrence in a Mixed Duopsony with a Cooperative," Spatial Economic Analysis, Taylor & Francis Journals, vol. 11(3), pages 340-354, July.
    5. Marten Graubner & Richard J. Sexton, 2023. "More competitive than you think? Pricing and location of processing firms in agricultural markets," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 784-808, May.
    6. Noriaki Matsushima, 2017. "Expanding distribution channels," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 24(3-4), pages 464-484, October.
    7. Park, Junseok & Moon, Ilkyeong, 2023. "A facility location problem in a mixed duopoly on networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    8. Sesmero Juan, 2018. "Spatial Pricing in Uncontested Procurement Markets: Regulatory Implications," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 16(1), pages 1-14, January.
    9. Panagiotou, Dimitrios, 2019. "Pricing behavior in a mixed spatial duopsony with an agricultural cooperative under asymmetric information," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 1).
    10. Panagiotou, Dimitrios & Stavrakoudis, Athanassios, 2018. "Free-on-board and uniform delivered pricing strategies in pure and mixed spatial duopolies: The strategic role of cooperatives," The Journal of Economic Asymmetries, Elsevier, vol. 18(C), pages 1-1.

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    Keywords

    Agribusiness;

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