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Abstract
In this paper, we develop a model that explains the exporters’ behaviour in international
commodity markets considering explicitly the case of an imperfectly competitive structure of these
markets. More specifically, drawing from the imperfect competition and trade literature, we derive
price transmission equations between producer and consumer prices and between producer and
export prices that can be included in large commodity models in order to verify how results of these
models change assuming the imperfect competition hypothesis. The results obtained carrying out a
simple simulation exercise, with two competing exporting countries and one importing region, show
the relevance of assuming imperfect competition in commodity markets.