Estimating oligopsony power on two vertically integrated markets

The paper develops a new approach for the estimation of oligopsony power on two vertically integrated markets. The two subsequent markets with oligopsony power are structurally modelled. Deduced price equations are embedded in a VECM, transformed and estimated via the Kalman-Filter to allow for time-variation in the cointegration parameters. A dynamic factor model extracts common factors from the time-varying coefficients and thereby allows identification of buyers’ market power on both markets. The framework is applied to the German dairy supply chain. Results indicate lower levels of market imperfections on the raw milk and higher levels on the dairy output market.


Issue Date:
Aug 28 2017
Publication Type:
Conference Paper/ Presentation
Language:
English
Total Pages:
23




 Record created 2017-08-03, last modified 2017-08-29

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