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Free-on-board and uniform delivery pricing strategies in a mixed duopsony

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  • Panos Fousekis

Abstract

This paper analyses free-on-board (FOB) versus uniform delivery (UD) pricing policy choices in a mixed duopsony market. We use a two-stage game between a profit maximising investor owned firm and a cooperative which aims at maximising the welfare of its members. The results show that UD (FOB) pricing will be chosen by both competitors in markets where transportation costs are small (large) relative to the net value of the primary product. A mixed FOB--UD pricing equilibrium emerges for an intermediate market structure. Oxford University Press and Foundation for the European Review of Agricultural Economics 2010; all rights reserved. For permissions, please email journals.permissions@oup.com, Oxford University Press.

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  • Panos Fousekis, 2011. "Free-on-board and uniform delivery pricing strategies in a mixed duopsony," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 38(1), pages 119-139, March.
    • Handle: RePEc:oup:erevae:v:38:y:2011:i:1:p:119-139
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    File URL: http://hdl.handle.net/10.1093/erae/jbq048
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    Cited by:

    1. 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.
    2. Hueth, Brent & Taylor, Christopher W., 2013. "Spatial Competition in Agricultural Markets: A Discrete-Choice Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150506, Agricultural and Applied Economics Association.
    3. Marten Graubner, 2018. "Lost in space? The effect of direct payments on land rental prices," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(2), pages 143-171.
    4. 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.
    5. Sesmero, Juan P. & Balagtas, Joseph V. & Pratt, Michelle, 2015. "The Economics of Spatial Competition for Corn Stover," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(3), pages 1-17, September.
    6. Graubner, Marten & Balmann, Alfons, 2012. "Spatial Pricing on Land Rental Markets," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 125349, Agricultural and Applied Economics Association.
    7. Evans, Alecia & Sesmero, Juan Pablo, 2024. "Joint Choice of Location and Spatial Pricing Policy in a Mixed Market," 2024 Annual Meeting, July 28-30, New Orleans, LA 343956, Agricultural and Applied Economics Association.
    8. Hanisch Markus & Rommel Jens & Müller Malte, 2013. "The Cooperative Yardstick Revisited: Panel Evidence from the European Dairy Sectors," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 151-162, December.
    9. Zavelberg, Yvonne & Storm, Hugo, 2016. "Pricing behaviour of cooperatives and investor-owned dairies under spatial competition," Discussion Papers 250230, University of Bonn, Institute for Food and Resource Economics.
    10. 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.
    11. Tina L. Saitone & Richard J. Sexton & Benoît Malan, 2018. "Price premiums, payment delays, and default risk: understanding developing country farmers’ decisions to market through a cooperative or a private trader," Agricultural Economics, International Association of Agricultural Economists, vol. 49(3), pages 363-380, May.
    12. Tribl, Christoph & Morawetz, Ulrich & Salhofer, Klaus, 2017. "Spatial Competition In A Mixed Market - The Case Of Milk Processors," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 260911, European Association of Agricultural Economists.
    13. 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).

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