Information Sharing and Oligopoly in Agricultural Markets: The Role of Cooperative Bargaining Associations

Brent Hueth () and Philippe Marcoul ()

No 22232, 2003 Annual meeting, July 27-30, Montreal, Canada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: We study incentives for information sharing (about uncertain future demand for final output) among agricultural intermediaries in imperfectly competitive markets for farm output. Information sharing always increases expected grower and consumer surplus, but may reduce expected intermediary profits. Even when expected intermediary profits increase with information sharing, firms face a Prisoner's Dilemma where it is privately rational for each firm to withhold information, given that other firms report truthfully. This equilibrium can be avoided if firms' information reports are verifiable, and if firms commit to an ex ante contract that forces ex post information revelation. We argue that agricultural bargaining represents one means to achieve verifiability and to implement such a contract.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 26
Date: 2003
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Journal Article: Information Sharing and Oligopoly in Agricultural Markets: The Role of the Cooperative Bargaining Association (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea03:22232

DOI: 10.22004/ag.econ.22232

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