Cartel Pricing with Entry: the Experience of the Far West Marketing Order for Spearmint

Joseph Balagtas (), William Masters and Timothy Zimmer

No 19328, 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper documents the remarkable experience of the Far West mint producers in the operation of their marketing order. From 1993 to 2002, the marketing order witnessed a dramatic reduction its share of the Scotch spearmint market, as well as a reduction in both its price. We apply a model of a cartel facing a competitive fringe to describe the fall in the marketing order price as a logical consequence of increased world production of spearmint oil. We estimate an econometric model of the marketing order price and find that a 1-percent change in the marketing order's market share corresponds to a 0.8 percent change in the marketing order price.

Keywords: Marketing (search for similar items in EconPapers)
Pages: 20
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea05:19328

DOI: 10.22004/ag.econ.19328

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