Estimating market power by retailers in a dynamic framework: the Italian PDO cheese market

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18 Citazioni (Scopus)

Abstract

In this article, we evaluate the role of market power by retailers within the supply chain of Parmigiano Reggiano (PR) and Grana Padano (GP), the two most famous Italian quality cheeses. Market power is analysed in the context of a dynamic imperfect competition model of the supply chain, in which retailers are allowed to exert market power both downstream and upstream. We jointly estimate market-power parameters together with supply and demand elasticities, by means of a structural system of demand, supply and price-transmission equations, estimated using the generalised method of moments. We find evidence of downstream market power by retailers (toward final consumers) for PR and GP, but no evidence of upstream market power (toward processors ⁄ripeners). These results may be explained by the structure of the supply chain and by the peculiar characteristics of the two cheeses.
Lingua originaleEnglish
pagine (da-a)33-53
Numero di pagine21
RivistaJournal of Agricultural Economics
Volume64
DOI
Stato di pubblicazionePubblicato - 2013

Keywords

  • Imperfect competition
  • PDO cheese
  • dynamic modelling
  • market power

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