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Agricultural and Resource Economics Review >
Volume 27, Number 2, October 1998 >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/31516
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| Title: | REGULATION, MARKET POWER, AND ADVERTISING EFFECTIVENESS |
| Authors: | Chen, Kevin
Weerahewa, Jeevika |
| Issue Date: | 1998-10 |
| Abstract: | Using the case of Canadian dairy industry, this paper investigates the farm level effectiveness of generic advertising in two vertically related markets under government regulation and oligopolistic power. Comparative static analysis indicates that an increase in advertising may either increase or decrease the farm level profit when the processing industry is oligopolistic. When advertising leads to an increase in the farm level profit under the oligopolistic processing industry, the size of this effect may be more than, less than, or the same as that under perfect competition. Specifications of the retail demand function play an important role in determining both the direction and magnitude of the effect of advertising on the farm level profit under the oligopolistic processing industry. The simulation results of the Canadian butter industry illustrate that the magnitude of the bias caused by an erroneous assumption regarding the market structure could be significant. |
| URI: | http://purl.umn.edu/31516 |
| Institution/Association: | Agricultural and Resource Economics Review>Volume 27, Number 2, October 1998 |
| Total Pages: | 9 |
| Language: | English |
| Journal Issue : | Agricultural and Resource Economics Review |
| Journal Volume: | 27 |
| Journal Date: | October 1998 |
| From Page: | 209 |
| To Page: | 217 |
| Collections: | Volume 27, Number 2, October 1998
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| 27020209.pdf | 845Kb | PDF | View/Open |
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