Pricing Policies under Different Objectives: Implications for the Pricing Behaviour of AWB Ltd

Alexandra E. Lobb and Robert Weston Fraser

No 125132, 2002 Conference (46th), February 13-15, 2002, Canberra from Australian Agricultural and Resource Economics Society

Abstract: This study is motivated by the suggestion that the objectives of the AWB Ltd have changed since semi-privatisation of the Australian Wheat Board under the Wheat Marketing Act, 1989. Conceptualising this change of objectives as a shift from revenue maximization to profit maximization, this study examines the impact of such a change on the pricing policies of a multi-market price-setting firm. More specifically, this study investigates, for two hypothetical objective functions, a risk averse firm’s price-setting behaviour in an “overseas” and a “domestic” market, given differing costs of supply, uncertain demand functions and differing price elasticities of demand in each market. The aim is to generate empirically testable hypotheses relating to the impact of a change of objectives on pricing behaviour.

Keywords: change of objectives; privatization; AWB Ltd.; Crop Production/Industries (search for similar items in EconPapers)
Date: 2002-02
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