Entry deterring effects of contractual relations in the dairy processing sector

Yvonne Zavelberg, Christine Wieck and Thomas Heckelei

No 156225, 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 from German Association of Agricultural Economists (GEWISOLA)

Abstract: Addressing the competitive imbalances in the dairy sector, the High Level Group of dairy market experts proposed written formal contracts between raw milk producers and processors to improve the bargaining position of producers and to stabilize milk supply. However, exclusive contracts, where a farmer is obliged to deliver his whole production amount to one dairy only, may lead to the opposite effect as they may deter market entry of rival dairies. We develop a theretical model and show that an incumbent dairy can deter entry of a rival dairy when the farmer is risk averse.

Keywords: Agricultural and Food Policy; Demand and Price Analysis; Industrial Organization (search for similar items in EconPapers)
Pages: 2
Date: 2013
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Entry deterring effects of contractual relations in the dairy processing sector (2016)
Working Paper: Entry deterring effects of contractual relations in the dairy processing sector (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi13:156225

DOI: 10.22004/ag.econ.156225

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