Tomatoes, Technology, and Oligopsony
Volume: Volume 11, No. 2
Issue: Autumn 1980
Pages: pp. 584-602
Authors: Richard E. Just and Wen S. Chern
Title: Tomatoes, Technology, and Oligopsony
Abstract: This paper draws on the theory of monopsony and oligopsony to develop an empirical test for the presence of the market power where an exogenous shock on the relevant market may be observed. An application of this test is demonstrated for the tomato processing industry, where the exogenous shock is created by the introduction of mechanical harvesting technology. The results are remarkably consistent with oligopsonistic dominant firm-price leadership. Statistical tests suggest rejection of the null hypothesis of competition.
JEL Classification
Microeconomics Theory of Firm and Industry under Imperfectly Competitive Market Structures (0226)
Market Structure: Industrial Organization and Corporate Strategy (6110)
Agricultural Supply and Demand Analysis (7110)