Pricing behavior in a mixed spatial duopsony with an agricultural cooperative under asymmetric information

Dimitrios Panagiotou

Agricultural Economics Review, 2019, vol. Volume 20, issue Issue 01

Abstract: The present study examines the pricing behavior of an investor owned firm (IOF) in a mixed spatial duopsonistic game with an agricultural cooperative (COOP), under asymmetric/incomplete information. Results indicate that, the higher is the probability that the coordination cost per member of the COOP is high, the higher are the profits and the market share for the IOF, both under accommodation and under entry deterrence. Accordingly, the IOF has a vested interest in creating a "bad" reputation regarding the COOP’s member coordination cost. Hence, unlike the findings of the relevant literature that COOPs act as disciplinarians for the IOFs under complete information, in the present mixed spatial game of asymmetric information, IOFs might increase their profits as compared to the outcome of the equivalent game of complete information.

Keywords: Agribusiness; Demand and Price Analysis (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aergaa:330635

DOI: 10.22004/ag.econ.330635

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