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On Storage Behavior Under Imperfect Competition

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  • Chavas, Jean-Paul

Abstract

This paper investigates the economic implications of storage behavior under imperfect competition. It evaluates the economic dynamics implied by a storage firm under alternative market structures. This includes perfect competition as well as imperfect competition under Cournot behavior. The conceptual analysis is used to specify and estimate a model of storage behavior, with an econometric application to the US American cheese market. The empirical results provide statistical evidence of non-competitive storage behavior. They show that the exercise of market power contributes to reduced stock fluctuations and increased price instability in the US cheese market.

Suggested Citation

  • Chavas, Jean-Paul, 2006. "On Storage Behavior Under Imperfect Competition," Working Papers 201527, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    • Handle: RePEc:ags:uwfswp:201527
    DOI: 10.22004/ag.econ.201527
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    File URL: https://ageconsearch.umn.edu/record/201527/files/WP2006-04.pdf
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    References listed on IDEAS

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    Cited by:

    1. Jean-Paul Chavas, 2008. "On Storage Behavior Under Imperfect Competition, with Application to the American Cheese Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(4), pages 325-339, December.

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