A Model of Competitive Behavior in Food Industries

C. R. Handy and D. I. Padberg

American Journal of Agricultural Economics, 1971, vol. 53, issue 2, 182-190

Abstract: While conventional industrial organization theory has been used to explain behavior of the food distribution oligopoly, a more careful analysis shows its behavior tendencies to be basically different from the manufacturing oligopoly. The larger distribution firm tends toward price competition while the smaller tends toward nonprice competition. The interaction between manufacturing and distribution oligopolies in the food industry provides a unique balance between progressiveness and economy which is not available in industries where the distribution oligopoly has not developed. This different consequence of large firms brings up some basic questions about antitrust objectives and philosophy.

Date: 1971
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