Information Sharing and Oligopoly in Agricultural Markets: The Role of the Cooperative Bargaining Association
We study incentives for information sharing among agricultural intermediaries in imperfectly competitive markets for farm output. Information sharing always increases expected grower and total surplus, but may reduce expected intermediary profits. Even when expected profits increase with information sharing, intermediary firms face a prisoner's dilemma where it is privately rational 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 enforces participation in information sharing. We show how agricultural bargaining legislation can implement such a contract with the bargained farm price representing a sufficient statistic of all information held by intermediary firms. Copyright 2006, Oxford University Press.
Year of publication: |
2006
|
---|---|
Authors: | Hueth, Brent ; Marcoul, Philippe |
Published in: |
American Journal of Agricultural Economics. - Agricultural and Applied Economics Association - AAEA. - Vol. 88.2006, 4, p. 866-881
|
Publisher: |
Agricultural and Applied Economics Association - AAEA |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
An Essay on Cooperative Bargaining in U.S. Agricultural Markets
Hueth, Brent, (2003)
-
Cooperatives and Contracting in Agriculture: The Case of West Liberty Foods
Ginder, Roger G., (2005)
-
OBSERVATIONS ON COOPERATIVE BARGAINING IN U.S. AGRICULTURAL MARKETS
Hueth, Brent, (2002)
- More ...