IDEAS home Printed from https://ideas.repec.org/a/bla/ajarec/v31y1987i3p191-203.html
   My bibliography  Save this article

A Dynamic Analysis Of Us Export Wheat Pricing And Market Shares

Author

Listed:
  • Fredoun Z. Ahmadi‐Esfahani
  • Colin A. Carter

Abstract

The economics of a higher loan rate to support US wheat prices is analysed. Utilising optimal control theory, a dynamic wheat trade model is developed. The basic premise underlying the model is that the United States finds itself having transient monopoly power in the wheat market. An expression for the optimal pricing policy which maximises the present value of expected profits over the indefinite future is derived. Results from both the theoretical and empirical models demonstrate that the US wheat pricing strategy depends on its costs relative to competitors' costs, the discount rate and the competitors' response function. The main policy implication of the analysis is for the dominant wheat exporting country constantly to seek to lower costs relative to competitors and to maintain a price exceeding unit cost without encouraging competitors' expansion.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Fredoun Z. Ahmadi‐Esfahani & Colin A. Carter, 1987. "A Dynamic Analysis Of Us Export Wheat Pricing And Market Shares," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 31(3), pages 191-203, December.
    • Handle: RePEc:bla:ajarec:v:31:y:1987:i:3:p:191-203
    DOI: j.1467-8489.1987.tb00464.x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1467-8489.1987.tb00464.x
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/j.1467-8489.1987.tb00464.x?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
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Wilson, William W., 1986. "Proceedings of a Symposium on Competitiveness of U.S. Grains in International Markets," Agricultural Economics Miscellaneous Reports 119582, North Dakota State University, Department of Agribusiness and Applied Economics.
    2. Gaskins, Darius Jr., 1971. "Dynamic limit pricing: Optimal pricing under threat of entry," Journal of Economic Theory, Elsevier, vol. 3(3), pages 306-322, September.
    3. Dunmore, John C., 1985. "International Trade as a Source of Risk and Uncertainty," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 3(01), pages 1-8, February.
    4. Johnson, S. R. & Womack, Abner W. & Meyers, William H. & Young II, Robert E. & Brandt, Jon, 1985. "Options for the 1985 Farm Bill: An Analysis and Evaluation," FAPRI Staff Reports 244138, Food and Agricultural Policy Research Institute (FAPRI).
    5. Mitchell, Donald O & Duncan, Ronald C, 1987. "Market Behavior of Grains Exporters," The World Bank Research Observer, World Bank, vol. 2(1), pages 3-21, January.
    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. Ryan, Timothy J., 1994. "Marketing Australia's Wheat Crop: The Way Ahead," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(01), pages 1-15, April.

    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. David G. Blanchflower & Neil Millward & Andrew J. Oswald, 1989. "Unionization and Employment Behavior," NBER Working Papers 3180, National Bureau of Economic Research, Inc.
    2. Gautam Gowrisankaran & Thomas J. Holmes, 2000. "Do mergers lead to monopoly in the long run? Results from the dominant firm model," Staff Report 264, Federal Reserve Bank of Minneapolis.
    3. Yavapolkul, Navin & Gopinath, Munisamy & Gulati, Ashok, 2004. "Post-Uruguay Round price linkages between developed and developing countries: the case of rice and wheat markets," MTID discussion papers 76, International Food Policy Research Institute (IFPRI).
    4. Schankerman, Mark & Pakes, Ariel, 1986. "Estimates of the Value of Patent Rights in European Countries during the Post-1950 Period," Economic Journal, Royal Economic Society, vol. 96(384), pages 1052-1076, December.
    5. Daniel H. Pick & Timothy A. Park, 1991. "The Competitive Structure of U.S. Agricultural Exports," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(1), pages 133-141.
    6. William E. Kovacic & Carl Shapiro, 2000. "Antitrust Policy: A Century of Economic and Legal Thinking," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 43-60, Winter.
    7. Mita Bhattacharya & Jong-Rong Chen, 2009. "Market dynamics and dichotomy: evidence from Taiwanese manufacturing," Applied Economics, Taylor & Francis Journals, vol. 41(17), pages 2169-2179.
    8. Ariel Pakes & Mark Schankerman, 1984. "The Rate of Obsolescence of Patents, Research Gestation Lags, and the Private Rate of Return to Research Resources," NBER Chapters, in: R&D, Patents, and Productivity, pages 73-88, National Bureau of Economic Research, Inc.
    9. Pakes, Ariel & Nitzan, Shmuel, 1983. "Optimum Contracts for Research Personnel, Research Employment, and the Establishment of "Rival" Enterprises," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 345-365, October.
    10. Kofi O. Nti & Martin Shubik, 1981. "Duopoly with Differentiated Products and Entry Barriers," Cowles Foundation Discussion Papers 576, Cowles Foundation for Research in Economics, Yale University.
    11. Chakravorty, Ujjayant & Leach, Andrew & Moreaux, Michel, 2011. "Would hotelling kill the electric car?," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 281-296, May.
    12. Semmler, Willi & Di Bartolomeo, Giovanni & Minooei Fard, Behnaz & Braga, Joao Paulo, 2022. "Limit pricing and entry game of renewable energy firms into the energy sector," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 179-190.
    13. Kelley, Paul L., 1986. "Its Time (Past Time) for Land Grant Universities to Internationalize Their Research and Extension Agricultural Policy Agenda," Staff Papers 133693, Kansas State University, Department of Agricultural Economics.
    14. Arnade, Carlos & Hoffman, Linwood, 2016. "Maize Price Relationships in a Changing International Market: Have Brazil and/or Ukraine Crossed a Threshold?," 2017 Allied Social Sciences Association (ASSA) Annual Meeting, January 6-8, 2017, Chicago, Illinois 250116, Agricultural and Applied Economics Association.
    15. Cairns, Robert D. & Calfucura, Enrique, 2012. "OPEC: Market failure or power failure?," Energy Policy, Elsevier, vol. 50(C), pages 570-580.
    16. Berck, Peter & Perloff, Jeffrey M., 1988. "The dynamic annihilation of a rational competitive fringe by a low-cost dominant firm," Journal of Economic Dynamics and Control, Elsevier, vol. 12(4), pages 659-678, November.
    17. Marvin Lieberman, 2001. "The Magnesium Industry in Transition," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(1), pages 71-80, August.
    18. Braga, Joao Paulo & Semmler, Willi & Grass, Dieter, 2021. "De-risking of green investments through a green bond market – Empirics and a dynamic model," Journal of Economic Dynamics and Control, Elsevier, vol. 131(C).
    19. Tony Fang & John S. Heywood, 2006. "Unionization and plant closure in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(4), pages 1173-1194, November.
    20. Thomas, Louis A., 1999. "Incumbent firms' response to entry: Price, advertising, and new product introduction," International Journal of Industrial Organization, Elsevier, vol. 17(4), pages 527-555, May.

    More about this item

    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:bla:ajarec:v:31:y:1987:i:3:p:191-203. 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.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.