Since 2014
Entry deterring effects of contractual relations in the dairy processing sector
Bio-based and Applied Economics
View Archive Info| Field | Value | |
| Title |
Entry deterring effects of contractual relations in the dairy processing sector
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| Creator |
Zavelberg, Yvonne; University of Bonn
Heckelei, Thomas; University of Bonn Wieck, Christine; University of Bonn |
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| Subject |
entry deterrence; imperfect competition; buyer power; exclusive contracts; dairy processing
L13; L14; L41 |
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| Description |
The European Commission has launched the so-called “milk package” in October 2012 that allows Member States to require compulsory written contracts between milk producers and investor-owned processors. We argue that compulsory contracts have anticompetitive effects when they are exclusive in the sense that they comprise the obligation to supply to the contractor only. The objective of this paper is to set up a game theoretic model to analyze imperfect competition on the raw milk market that may result from entry deterring effects of exclusive contracts between dairy producers and processors. Building on the antitrust literature, the model incorporates the specific characteristics of the milk market and considers the risk attitude of milk producers and uncertainty of a rival dairy’s market entry. Under certain combinations of probability of the rival’s market entry and risk aversion of the producer, an incumbent can deter market entry by offering an exclusive contract.
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| Publisher |
Bio-based and Applied Economics
Bio-based and Applied Economics |
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| Contributor |
German Reseach Foundation
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| Date |
2016-04-13
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — |
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| Format |
application/pdf
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| Identifier |
http://www.fupress.net/index.php/bae/article/view/16492
http://www.fupress.net/index.php/bae/article/download/16492/17034 10.13128/BAE-16492 |
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| Source |
Bio-based and Applied Economics; Vol 5, No 1 (2016); 83-98
Bio-based and Applied Economics; Vol 5, No 1 (2016); 83-98 2280-6172 2280-6180 |
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| Language |
eng
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| Relation |
10.13128/BAE-16492
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| Rights |
The authors retain all rights to the original work without any restrictions.License for Published ContentsYou are free to copy, distribute and transmit the work, and to adapt the work. You must attribute the work in the manner specified by the author or licensor (but not in any way that suggests that they endorse you or your use of the work).Licence scheme | Legal codeLicense for MetadataThis Journal published articles metadata are dedicated to the public domain by waiving all publisher's rights to the work worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.You can copy, modify, distribute and perform the work, even for commercial purposes, all without asking permission.Licence scheme | Legal code
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