This study develops a framework for the analysis of optimal advertising and free-rider problem. Previous studies in the literature were extended in two ways. First, the new framework allows retailer's oligopsony power separately from processor's market power. Second, to examine the free-rider problem, we introduce the trade component to the model and divide domestic producers into two groups: participating producers and non-participating producers in the possible voluntary program. The free-rider problem was measured as the amount of domestic price decrease due to the increased production from importers and non-participating producers.


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