Journal Article

A Spatial Equilibrium Model for Imperfectly Competitive Milk Markets

Tsunemasa Kawaguchi, Nobuhiro Suzuki and Harry M. Kaiser

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 79, issue 3, pages 851-859
Published in print August 1997 | ISSN: 0002-9092
Published online August 1997 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/1244426
A Spatial Equilibrium Model for Imperfectly Competitive Milk Markets

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  • Housing Markets, Production Analysis, and Business Location
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A generalization of Takayama and Judge's spatial equilibrium model that allows for any degree of market structure is presented. The model is applied to the Japanese dairy industry to examine interregional milk movements generated under alternative assumed degrees of market competition. The results indicate that the perfect competition and monopoly equilibrium solutions result in a lower and a higher price, respectively, than actual price levels. On the other hand, the Cournot-Nash equilibrium solutions are the most similar to actual observations, and the actual interregional milk movements are best explained by imperfectly competitive behavior.

Keywords: imperfect competition; Japanese milk markets; spatial equilibrium models; Q130; R320

Journal Article.  0 words. 

Subjects: Housing Markets, Production Analysis, and Business Location ; Agricultural Economics

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