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Information Sharing and Oligopoly in Agricultural Markets: The Role of Cooperative Bargaining Associations

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  • Hueth, Brent
  • Marcoul, Philippe

Abstract

We study incentives for information sharing (about uncertain future demand for final output) among agricultural intermediaries in imperfectly competitive markets for farm output. Information sharing always increases expected grower and consumer surplus, but may reduce expected intermediary profits. Even when expected intermediary profits increase with information sharing, firms face a Prisoner's Dilemma where it is privately rational for each firm to withhold information, given that other firms report truthfully. This equilibrium can be avoided if firms' information reports are verifiable, and if firms commit to an ex ante contract that forces ex post information revelation. We argue that agricultural bargaining represents one means to achieve verifiability and to implement such a contract.

Suggested Citation

  • Hueth, Brent & Marcoul, Philippe, 2003. "Information Sharing and Oligopoly in Agricultural Markets: The Role of Cooperative Bargaining Associations," 2003 Annual meeting, July 27-30, Montreal, Canada 22232, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22232
    DOI: 10.22004/ag.econ.22232
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    References listed on IDEAS

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    1. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, December.
    2. Amir Ziv, 1993. "Information Sharing in Oligopoly: The Truth-Telling Problem," RAND Journal of Economics, The RAND Corporation, vol. 24(3), pages 455-465, Autumn.
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    Cited by:

    1. May, Daniel E., 2011. "Bilateralism in Agriculture when Countries use Distorting Domestic Policies," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114657, European Association of Agricultural Economists.
    2. Debdatta Saha & Prabal Roy Chowdhury, 2018. "Coordination and Private Information Revelation," Games, MDPI, vol. 9(3), pages 1-21, September.
    3. Daniel E. May & Jaime Rodríguez, 2014. "Farmers’ Economic Behaviour: Current Research and Research Gaps," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 3(6), pages 362-369.
    4. Ahmet Candemir & Sabine Duvaleix & Laure Latruffe, 2021. "Agricultural Cooperatives And Farm Sustainability – A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1118-1144, September.
    5. Grazia Calabrò & Simone Vieri, 2015. "Political Actions Oriented to Territorial Development: The Multifunctional Role of Agriculture," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(S9), pages 1346-1346, November.
    6. Grazia Calabrò & Simone Vieri, 2015. "Political Actions Oriented to Territorial Development: The Multifunctional Role of Agriculture," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(Special 9), pages 1346-1346, November.
    7. Daniel Esteban May, 2012. "Addressing biodiversity loss when international markets of agricultural commodities are oligopolistic," Economics and Business Letters, Oviedo University Press, vol. 1(1), pages 53-57.
    8. Gloria Solano Hermosilla & Pavel Ciaian & Jonas Kathage, 2019. "Market transparency: Costs of external data reporting by private operators in the EU agri-food supply chain - A survey-based analysis," JRC Research Reports JRC116927, Joint Research Centre.
    9. Lemarié, Stéphane & Marcoul, Philippe, 2018. "Coordination and information sharing about pest resistance," Journal of Environmental Economics and Management, Elsevier, vol. 87(C), pages 135-149.

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