Mixed Markets in the Food Processing Industry
No 24741, 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists
The food processing industry in Western countries operates in markets that usually are highly concentrated, consisting of a few cooperatives and investor-owned firms. However, in the literature some studies questioned whether the mixed market structure is a stable equilibrium, and suggestions are made that the cooperatives eventually will crowd out all investor-owned firms. To analyse the problem, the family of models of mixed markets is generalized and analysed. It is shown that a mixed market equilibrium may occur under quite general conditions. Also, it is shown that the investor-owned firm may serve as a yardstick of production to the cooperative, helping farmers achieve an increased payoff relative to a situation with a single coop in the market.
Keywords: Agribusiness (search for similar items in EconPapers)
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