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Information Sharing and Oligopoly in Agricultural Markets: The Role of the Cooperative Bargaining Association

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  • Brent Hueth
  • Philippe Marcoul
Abstract
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.

Suggested Citation

  • Brent Hueth & Philippe Marcoul, 2006. "Information Sharing and Oligopoly in Agricultural Markets: The Role of the Cooperative Bargaining Association," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 866-881.
    • Handle: RePEc:oup:ajagec:v:88:y:2006:i:4:p:866-881
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2006.00903.x
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    References listed on IDEAS

    as
    1. Amir Ziv, 1993. "Information Sharing in Oligopoly: The Truth-Telling Problem," RAND Journal of Economics, The RAND Corporation, vol. 24(3), pages 455-465, Autumn.
    2. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, April.
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    Cited by:

    1. Gloria Solano Hermosilla & Pavel Ciaian & Jonas Kathage, 2019. "Market transparency: Costs of external data reporting by private operators in the EU agri-food supply chain - A survey-based analysis," JRC Research Reports JRC116927, Joint Research Centre.
    2. Ahmet Candemir & Sabine Duvaleix & Laure Latruffe, 2021. "Agricultural Cooperatives And Farm Sustainability – A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1118-1144, September.
    3. repec:ove:journl:aid:9379 is not listed on IDEAS
    4. May, Daniel E., 2011. "Bilateralism in Agriculture when Countries use Distorting Domestic Policies," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114657, European Association of Agricultural Economists.
    5. Grazia Calabrò & Simone Vieri, 2015. "Political Actions Oriented to Territorial Development: The Multifunctional Role of Agriculture," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(Special 9), pages 1346-1346, November.
    6. Lemarié, Stéphane & Marcoul, Philippe, 2018. "Coordination and information sharing about pest resistance," Journal of Environmental Economics and Management, Elsevier, vol. 87(C), pages 135-149.
    7. Debdatta Saha & Prabal Roy Chowdhury, 2018. "Coordination and Private Information Revelation," Games, MDPI, vol. 9(3), pages 1-21, September.
    8. Grazia Calabrò & Simone Vieri, 2015. "Political Actions Oriented to Territorial Development: The Multifunctional Role of Agriculture," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(S9), pages 1346-1346, November.
    9. Daniel E. May & Jaime Rodríguez, 2014. "Farmers’ Economic Behaviour: Current Research and Research Gaps," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 3(6), pages 362-369.

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