Friday, December 2, 2011
Posted by D. Daniel Sokol
Oleksandr Perekhozhuk, Andriy Matyukha and Thomas Glauben, Leibniz Institute of Agricultural Development in Central and Eastern Europe describe Estimating the Degree of Buyers' Market Power: Evidence from the Ukrainian Meat Processing Industry.
ABSTRACT: This study develops a structural market model for the econometric analysis of buyers’ market power in the Ukrainian meat processing industry, because there is some evidence that suggests that meat processors may excise market power in the agricultural market of slaughtered livestock. The estimation results did not produce any evidence suggesting the existence of buyers’ market power. Contrary to many other NEIO-studies, we extended the market structure market model by the three subsequent models. Using endogenously determined values for market power parameter, we found that meat processors concerning the buyers’ market for slaughtered livestock behave consistently with Cournot conjectures.