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Price or Quantity Competition? Oligopolistic Structures in International Commodity Markets

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  • Carter, Colin A
  • MacLaren, Donald

Abstract

International commodity markets may be characterized by price or quantity competition and by product differentiation. As an illustration, this paper presents a set of models of the Japanese market for imported beef. The models are evaluated using a non-nested econometric test. The one which best fits the data is a Stackelberg model with price leadership by Australia. This result provides evidence on the explicit nature of the game being played by exporters, unlike the applied conjectural variations approach which provides only an index of how competitive the market is. Copyright 1997 by Blackwell Publishing Ltd.

Suggested Citation

  • Carter, Colin A & MacLaren, Donald, 1997. "Price or Quantity Competition? Oligopolistic Structures in International Commodity Markets," Review of International Economics, Wiley Blackwell, vol. 5(3), pages 373-385, August.
    • Handle: RePEc:bla:reviec:v:5:y:1997:i:3:p:373-85
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    Cited by:

    1. Steinmetz, Alexander, 2010. "Price and inventory dynamics in an oligopoly industry: A framework for commodity markets," W.E.P. - Würzburg Economic Papers 82, University of Würzburg, Department of Economics.
    2. B. Stephen Labson & Gordon C. Rausser, 1992. "Modeling Phased Reduction of Distortionary Policies in the U.S. Wheat Market under Alternative Macroeconomic Environments," Center for Agricultural and Rural Development (CARD) Publications 90-gatt11, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    3. Song, Baohui & Marchant, Mary A. & Xu, Shuang, 2006. "Who Dominates Market Power for U.S.-China Soybean Trade?," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35407, Southern Agricultural Economics Association.
    4. C. S. C. Sekhar, 2010. "Structure of the World Wheat Market: Some Implications for Strategic Trade Policy?," Journal of Quantitative Economics, The Indian Econometric Society, vol. 8(2), pages 142-158.
    5. Asgari Mahdi & Saghaian Sayed H., 2013. "Oligopolistic Market Structure in the Japanese Pistachio Import Market," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 87-99, September.
    6. Margherita Scoppola, 2010. "The Liberalisation of Tariff Rate Quotas under Oligopolistic Competition," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 584-604, September.
    7. Mulik Kranti & Crespi John M., 2011. "Geographical Indications and The Trade Related Intellectual Property Rights Agreement (TRIPS): A Case Study of Basmati Rice Exports," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-21, May.
    8. Ian Sheldon & Richard Sperling, 2003. "Estimating the Extent of Imperfect Competition in the Food Industry: What Have We Learned?," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 89-109, March.
    9. McCorriston, Steve & MacLaren, Donald, 2005. "Single-desk state trading exporters," European Journal of Political Economy, Elsevier, vol. 21(2), pages 503-524, June.
    10. Carter, Colin A. & MacLaren, Donald & Yilmaz, Alper, 1999. "How Competitive Is The World Wheat Market?," Working Papers 11973, University of California, Davis, Department of Agricultural and Resource Economics.
    11. Alexandre Gohin & Hervé Guyomard, 2000. "Measuring Market Power for Food Retail Activities: French Evidence," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 181-195, May.
    12. Alexander Steinmetz, 2010. "Price and Inventory Dynamics in an Oligopoly Industry: A Framework for Commodity Markets," Working Papers 092, Bavarian Graduate Program in Economics (BGPE).
    13. H. Phoebe Chan, 2022. "The Welfare Effects of Licensing Product-Differentiating Technology in a Commodity Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(4), pages 491-510, June.
    14. Alexandre Gohin & Herve Guyomard & . Esr. Département d'Economie Et Sociologie Ruralesdijon, 1997. "Measuring market power for food retail activities : French evidence [Mesure du pouvoir de marché de l'activité alimentaire de détail en France]," Post-Print hal-02839368, HAL.
    15. Song, Baohui & Veeramani, Venkat N. & Marchant, Mary A. & Xu, Shuang, 2004. "Estimation Of Market Power In The U.S. Soybean Export Markets," 2004 Annual meeting, August 1-4, Denver, CO 20311, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Jeffrey D. McDonald & Daniel A. Sumner, 2003. "The Influence of Commodity Programs on Acreage Response to Market Price: With an Illustration Concerning Rice Policy in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 857-871.
    17. Celal Tasdogan & Efthimia Tsakiridou & Konstantinos Mattas, 2005. "Country Market Power in EU Olive Oil Trade," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 3(2), pages 211-219.
    18. Reimer, Jeffrey J. & Stiegert, Kyle W., 2006. "Evidence on Imperfect Competition and Strategic Trade Theory," Staff Papers 12609, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    19. Andrés Julián Rendón Cardona, 2013. "Diferenciación oligopólica del café verde colombiano en el mercado estadounidense," Revista Ecos de Economía, Universidad EAFIT, June.
    20. Carmen Florido & Ana Aldanondo & Marta Jacob, 2002. "Firm Behaviour and Interaction in the European Banana Market: 1960–1993," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 319-344, July.
    21. Schmitz Andrew & Seale James L. & Chegini Claudine, 2019. "Japanese Beef Tariffs: Beef Quality, Farm Programs, and Producer Compensation," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 17(2), pages 1-15, November.
    22. Chen, Chi-Chung & McCarl, Bruce A. & Chang, Ching-Cheng & Hsu, Shih-Hsun, 2002. "Spatial Equilibrium Modeling With Imperfectly Competitive Markets: An Application To Rice Trade," 2002 Annual meeting, July 28-31, Long Beach, CA 19687, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    23. To Thi Kim Hong, 2016. "Effects of Exchange Rate and World Prices on Export Price of Vietnamese Coffee," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1756-1759.
    24. Junjie Zhou & Xiaoshuai Fan & Ying-Ju Chen & Christopher S. Tang, 2021. "Information Provision and Farmer Welfare in Developing Economies," Manufacturing & Service Operations Management, INFORMS, vol. 23(1), pages 230-245, 1-2.
    25. Daphne M.I. Verreth & Grigorios Emvalomatis & Frank Bunte & Ron Kemp & Alfons G.J.M. Oude Lansink, 2015. "Price Transmission, International Trade, and Asymmetric Relationships in the Dutch Agri‐Food Chain," Agribusiness, John Wiley & Sons, Ltd., vol. 31(4), pages 521-542, October.

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