Journal Article

Captive Supplies, Market Conduct, and the Open-Market Price

Azzeddine Azzam

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 80, issue 1, pages 76-83
Published in print February 1998 | ISSN: 0002-9092
Published online February 1998 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/3180270
Captive Supplies, Market Conduct, and the Open-Market Price

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In this paper I examine the anatomy of the price captive-supplies relationship to ascertain if some of the interpretations offered in the empirical literature are defensible. Gardner's one-product, two-input model is extended to consider a partially integrated oligopsonistic industry. The main result is that, although the empirical relationship between captive supplies and the price received by independent producers is negative, it may or may not be attributed to noncompetitive conduct. Hence, for an econometric model to detect what type of conduct the relationship reflects, more structural detail is needed than what so far has been provided in the literature.

Keywords: captive supplies; oligopsony; vertical integration; L130; Q130

Journal Article.  0 words. 

Subjects: Agricultural Economics ; Market Structure, Firm Strategy, and Market Performance

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