The Effects of Vertical Organization on the Pricing of Differentiated Products

Guanming Shi and Jean-Paul Chavas ()

Journal of Agricultural and Resource Economics, 2011, vol. 36, issue 3, 17

Abstract: We investigate differentiated product pricing and the effects of vertical organization under imperfect competition. We rely on vertical measures of concentration (termed VHHI) to study how the exercise of market power varies with substitution/complementarity relationships among products and vertical structures. This approach is applied to U.S. soybean seed pricing under vertical integration versus licensing. We find evidence that vertical organization affects seed prices, with an impact ranging from 1.87% to 13.6% of the mean price. These effects vary by institutional setup.We also find that complementarity can mitigate price enhancements associated with market concentration.

Keywords: Demand and Price Analysis; Industrial Organization (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:119157

DOI: 10.22004/ag.econ.119157

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