taxing agriculture instruments and incidence abstract this paper analyzes the ways in which individual instruments of tax subsidy policy involving agriculture affect income distribution production and trade in developing countries it highlights the interactions among policy instruments in effecting income transfers among government farmers and nonagricultural sectors these interactions and indirect effects become intelligible only when the multiplicity and characteristic forms of government interventions in international trade and the domestic economy are explicitly recognized in developing countries terms of trade taxes on agriculture cannot be easily replaced hence attempts to remove trade distortions with hypothetically nondistorting taxes can be counterproductive

downstream merger and welfare in a bilateral oligopoly i analyse the effects of a downstream merger in a differentiated oligopoly when there is bargaining between downstream firms and upstream agents firms or unions bargaining outcomes can be observable or unobservable by rivals when competition is in quantities upstream agents are independent and bargaining is over a uniform input price a merger between downstream firms may raise consumer surplus and overall welfare however when competition is in prices or the upstream agents are not independent or bargaining is over a two part tariff or bargaining covers both the input price and the level of output the standard welfare results are restored a downstream merger always reduces consumer surplus and overall welfare

the joint production of confidence endogenous regulation and nineteenth century commercial bank clearinghouses during the nineteenth century deposits increased relative to bank notes c ausing increased information asymmetry problems in banking this pape r describes how bank clearinghouses lowered these costs by monitoring bank activities and establishing mechanisms of managerial control i n effect regulating bank behavior such actions enforced the loca l one to one exchange rate between deposits and specie clearinghouse s increased regulation during financial panics creating and enforcin g a risk sharing device loan certificates for addressing panic rela ted information problems this paper concludes that the market s capacity to control bank managers depends on the banking product mix and more generally on information costs copyright 1987 by ohio state university press

vertical control opportunism and risk sharing abstract a manufacturer who offers secret contracts faces an opportunism problem she undercuts her own input prices and fails to offset retail competition i show that this problem diminishes when retailers are risk averse and face demand uncertainty risk aversion and uncertainty create a bilateral risk sharing incentive that raises equilibrium input prices above marginal cost the manufacturer can therefore profit from downstream risk aversion when retail competition is fierce

efficiency and equity in the producer levy of india india s producer levy scheme has been considered a prime example of government market intervention to depress price incentives for farm producers analysis in this study shows that the scheme increases the average producer price for the short run with inelastic supply in this case significant improvements in income distribution can be obtained with little loss of economic efficiency if the scheme is implemented effectively however if the scheme is applied for the long run it might result in market instability more critically the scheme is likely to have an adverse effect on income distribution in the absence of effective implementation

illinois free banking experience recent studies by a j rolnick and w e weber 1983 1984 suggest that the conventional view of wildcat banking during the free banking era misrepresents the actual experience and that the problems of th e period were linked to a restriction imposed on the free bank rather than the lack of regulation illinois free banking experience is re examined to see if the traditional account of wildcat banking accurat ely portrays the actual experience and to test the validity of the ro lnick and weber assertions the illinois evidence shows that the trad itional accounts of wildcat banking were exaggerated and that the rol nick and weber assertions are substantiated copyright 1988 by ohio state university press

countervailing power revisited abstract the paper uses the nash bargaining concept to study the predictions of the theory of countervailing power within two theoretical models a cournot model and a model of perfect competition within the cournot model a decrease in the number of retailers unambiguously leads to an increase in equilibrium consumer prices in the model of perfect competition the reverse is true one may thus conclude that countervailing power can have positive effects for the consumers only if competiton at the retail level is very fierce

industry profits and competition under bilateral oligopoly abstract we show that contrary to the key result of the standard cournot nash oligopoly model industry profits can increase with the number of firms if input prices are not exogenous but are determined by bargaining in bilateral oligopoly

agricultural price policy in general equilibrium models results and comparisons a number of alternative policies toward agricultural prices food subsidies and intersectoral allocation of investment are analyzed with computable general equilibrium models for six countries the models generally allow us to trace the intersectoral and intertemporal growth effects of these policies as well as their income distribution effects across social groups the results obtained are shown to be eventually quite different from those derived from partial equilibrium and multimarket approaches sensitivity analysis to alternative specifications of the mechanism of wage determination shows that the real income effects of price policies are critically dependent upon the particular theory of wage determination used

india s food procurement and distribution policy impact on prices and welfare abstract india procures wheat rice and sugar at a price below the market price and sells them in ration shops in the urban areas the rest is sold in the open market various authors including dantwala mellor and hayami et al have claimed that such a policy raises the open market price to such an extent that it leads to an increase in the average price received by farmers they conclude that both farmers and low income urban consumers with access to the ration shops gain while high income urban consumers who buy at the open market price lose we argue in this paper that the above result holds only in a special case and under unrealistic assumptions we examine several alternative cases we find that the impact of the policy on the average price is either negative or ambiguous a negative impact implies that farmers lose from the procurement policy the impact of the policy on the average price is unambiguously negative under rationing and an unsegmented market access by the rich to the ration shops under rationing and market segmentation the impact on the average price is ambiguous unless there is significant queuing at the ration shops in which case the impact is negative the impact is also negative under free trade the inclusion of distribution costs increases the probability that the policy will have a negative impact on the average price

on the welfare effects of vertical integration opportunism vs double marginalization abstract we investigate the welfare effects of vertical integration by an upstream supplier dealing with two downstream firms through secret linear tariffs we show that whether vertical integration is anti or procompetitive depends on the distribution of the bargaining power between firms in the pre integration case in particular when the supplier has all or at least higher bargaining power than downstream firms vertical integration is socially desirable on the contrary when downstream firms have all or at least higher bargaining power than the supplier integration is detrimental to society

price discrimination and bargaining empirical evidence from medical devices many important issues in business to business markets involve price discrimination and negotiated prices situations where theoretical predictions are ambiguous this paper uses new panel data on buyer supplier transfers and a structural model to empirically analyze bargaining and price discrimination in a medical device market while many phenomena that restrict price discrimination are suggested as ways to decrease hospital costs e g mergers group purchasing organizations and transparency i find that 1 non discriminatory pricing actually works against hospitals because competition is more intense under price discrimination and 2 results depend ultimately on a previously unexplored bargaining effect

plan and market in china s agricultural commerce this article examines interactions between markets and state commercial planning in the context of china s agricultural sector it begins with a discussion of recent trends in agricultural planning and commerce in china and then presents a theoretical model that analyzes the way that a mixed commercial system of the sort observed in china functions the theoretical analysis suggests that a mixed system is sustainable and can have desirable efficiency and distributional effects markets however limit the range of sustainable plans and in the presence of markets state planning may no longer directly influence production and consumption behavior

a larger slice or a larger pie an empirical investigation of bargaining power in the distribution channel this research aims to provide insights into the determinants of channel profitability and the relative power in the channel by considering consumer demand and the interactions between manufacturers and retailers in an equilibrium model we use the nash bargaining solution to determine wholesale prices and thus how margins are split in the channel equilibrium margins are a function of demand primitives and of retailer and manufacturer bargaining power bargaining power is itself a function of exogenous retail and manufacturer characteristics the parties bargaining positions are determined endogenously from the estimated substitution patterns on the demand side the more they have to lose in a negotiation relative to an outside option the weaker the bargaining position we use the proposed bargaining model to investigate the role of the three main factors that have been blamed for the power shift from manufacturers to retailers in recent years firm size increases store brand introductions and service level differentiation in our empirical analysis of the german market for coffee we find that bargaining power varies among the different manufacturer retailer pairs this result suggests that bargaining power is not an inherent characteristic of a firm but rather depends on the negotiation partner we are able to confirm empirically previous theoretical findings that there can be cases where the slice of the pie that goes to one of the channel members may decrease but the overall pie increases and compensates for the smaller share of profits

mergers when prices are negotiated evidence from the hospital industry in recent years many hospitals have merged in part to gain bargaining leverage with managed care organizations mcos we investigate the price impact of hospital mergers by formulating and estimating an equilibrium bargaining model between hospital systems and managed care health insurers over prices for inpatient services we estimate the parameters of the model using claims and discharge data from northern virginia in 2006 inova health system proposed to acquire prince william hospital we nd that this merger would have raised prices signicantly and that the remedy of separate bargaining imposed by the ftc in a separate hospital case would have resulted in a larger price increase

can targeted food programs improve nutrition an empirical analysis of india s public distribution system abstract despite the widespread belief that a substantial assault on poverty requires targeting scarce resources toward the poor practitioners frequently claim that targeted programs deliver fewer benefits to poor households than do universal programs this article evaluates this concern through an analysis of india s targeted food distribution program the public distribution system it first examines the case for targeting by assessing the responsiveness of caloric intake to the amount of the food grain subsidy a low elasticity suggests that improvements in nutrition may require large subsidies and hence a targeted program it then examines whether targeting adversely affects the probability of poor households participating in the program the empirical analysis identifies the effect of the program by combining time varying policy changes in the value of the program with cross sectional variation in program benefits generated by variation in market prices the results confirm the low responsiveness

distributional consequences of rural food levy and subsidized urban rations abstract governments in many developing countries have imposed food levies on farmers to provide subsidized food to urban consumers the resulting price discrimination between individuals has general equilibrium effects so that the welfare consequences of such a policy for different socio economic groups have been controversial we relate the distributional consequences to the parameters of the economy and identify systematic relationships among different partitions of the outcomes we show for instance that if the policy helps hurts richer city dwellers then it hurts helps poorer farmers

bilateral monopolies and incentives for merger the paper presents a model of duopoly in which firms acquire inputs through bilateral monopoly relations with suppliers it combines a bargaining model with a duopoly model to examine how input pri

competition through commissions and kickbacks in markets for retail financial products and health services consumers often rely on the advice of intermediaries to decide which specialized offering best fits their needs product providers in turn compete to influence the intermediaries advice through hidden kickbacks or disclosed commissions motivated by the controversial role of these widespread practices we formulate a model to analyze competition through commissions from a positive and normative standpoint the model highlights the role of commissions in making the advisor responsive to supply side incentives we characterize situations when commonly adopted policies such as mandatory disclosure and caps on commissions have unintended welfare consequences jel d21 d82 d83 g21 l15 l25

pass through vertical contracts and bargains abstract this paper analyzes the determinants of pass through that are specific to vertical relationships between wholesalers and retailers the type of vertical agreement firms contract upon as well as their relative bargaining power are identified as major determinants of pass through rates

effects of subsidized wheat consumption by state in india this paper reports the results of a study of the effects of the indian government s consumer subsidies on wheat demand results indicate consumption of subsidized wheat is higher in urban areas than in rural areas the public distribution of wheat in most states had little effect on demand in the commercial market which suggests the government is effective in targeting subsidized wheat to poor consumers

the nash bargaining solution in vertical relations with linear input prices abstract we re examine the nash bargaining solution when an upstream and n downstream firms bargain over a linear input price with unobservable contracts we show that the profit sharing rule is given by a simple and instructive formula which depends on the parties disagreement payoffs the profit weights in the nash product and the elasticity of derived demand a downstream firm s profit share increases in the equilibrium derived demand elasticity which in turn depends on the final goods demand elasticity

bank entry during the antebellum period a recent study by kenneth ng 1988 challenges the view the free banking laws lowered barriers to entry the authors study examines bank entry and capital formation in free and nonfree banking states during the free banking period a competitive model is developed and used to test if barriers were lowered in free banking states the evidence indicates that entry significantly increased after the enactment of the free banking laws and that entry policy in nonfree banking states appeared to have been liberalized when the free banking laws were enacted in other states copyright 1995 by ohio state university press

the unsupportable support price an analysis of collusion and government intervention in paddy auction markets in north india abstract this paper uses auction theory incorporating buyer asymmetry to analyse the structure of a small market for parmal paddy in north india and to assess the implications of alternative government policies our results suggest that two buyers collude in this market we are able to quantify the extent to which prices are depressed as a consequence such collusion probably characterizes many small grain markets in india government intervention in grain markets in india is pervasive and has in recent years led to its acquiring excessive food stocks and an unwillingness to enforce the support price using simulations we demonstrate that while reducing the support price for paddy may not have the desired effect of reducing government purchases a decrease in the percentage that millers are required to sell as levy to the government will

self limited empowerment democracy economic development and rural india this study deals with two questions i what accounts for the rise of the countryside in india s polity and ii how has rural power in the polity affected economic policy and economic outcomes for the peasantry the rural sector is typically weak in the early stages of development a powerful countryside therefore is a counter historical occurrence universal franchise and a competitive democracy in a primarily agrarian india have led to the empowerment of the countryside the power of the rural sector is however not unconstrained the first principal constraint is ironically the size of the agricultural sector itself beyond a point subsidising a large rural sector is fiscally difficult the size of the rural population thus cuts both ways it makes the countryside powerful in a democratic political system but checks this power economically the second principal constraint on rural power stems from the cross cutting nature of rural identities and interests farmers are also members of caste et

strategic delegation and delay in negotiations over the bargaining agenda this paper develops a game theoretic model that endogenizes the items included in the bargaining agenda the model s equilibria suggest two possible sources of inefficiency 1 exclusion of items from the bargaining agenda and 2 delay to agreement due to negotiations over the bargaining agenda evidence from union contract negotiations is provided to demonstrate the relevance of these sources of inefficiency the model also allows strategic delegation by the union in certain equilibria the surplus maximizing union selects wage maximizing delegates such as senior union members to negotiate the contract

countervailing power and consumer prices this paper considers the importance of countervailing power manifested as the effects of increased retail concentration on consumer prices and welfare within a market setting where imperfectly competitive retailers negotiate intermediate prices with a monopoly supplier only when retailer services are regarded as very close substitutes do final prices fall following a reduction in the number of retailers even in these circumstances the social benefits of countervailing power may not be realised as the supplier may seek to protect its profits by using a refusal to supply restraint to engage in exclusive trading

the relative profitability of nash bargaining on the labour demand curve or the contract curve abstract given the nash bargaining solution with parametric bargaining strengths and threat points it is shown that profits are often higher if the bargaining agenda between a union and a single firm or two unions and cournot duopolists excludes employment

exclusive contracts and bargaining power abstract incorporating nash bargaining into the standard one buyer one supplier framework in the chicago school critique we show a possibility that an inefficient incumbent supplier can deter a socially efficient new supplier entry through exclusive contracts

uncontrolled prices on a market with supply control abstract it is investigated in this article how a price increasing supply control measure on a regulated market influences the price on a parallel non regulated market determinants of the net impact including the rigidity of quota policy are elaborated

an evaluation of indian government rice policy in tamil nadu abstract the indian government procures rice from wholesalers or producers at a price below the market price and then distributes it to low income consumers at a subsidized price this paper uses a simulataneous equations econometric model to evaluate the effects of this policy on supply demand of rice in the state of tamil nadu between 1956 and 1985 results show that production is more responsive to power for irrigation and fertilizer prices than to output prices because supply is inelastic producers bear the burden of the tax imposed by procurement even though rice is procured from the wholesaler rice distributed by the government displaces rice demanded in the open market and thus the government distribution of rice has not increased the total consumption of rice

bargaining ability and competitive advantage empirical evidence from medical devices in markets where buyers and suppliers negotiate supplier costs buyer willingness to pay and competition determine only a range of potential prices leaving the final price dependent on other fac

bilateral control with vertical contracts when a manufacturer contracts secretly with competing retailers he is subject to opportunism and linear or non linear tariffs may not allow the manufacturer to maintain monopoly prices to analyse the effects of rpm o brien shaffer 1992 use a concept of contract equilibrium which concentrates on pairwise deviations thereby questioning the robustness of the analysis this paper emphasises the distinction between the contract equilibrium and standard non cooperative concepts we advocate for some caution in the use of the former concept as if overlooks an inexistence problem we then confirm the intuition that rpm can help solve the manufacturer s commitment problem this confirms that o brien shaffer s insight is robust and validates the courts reluctance against rpm

bank panics government guarantees and the long run size of the financial sector evidence from free banking america governments attempt to increase the confidence of financial market participants by making implicit or explicit guarantees of uncertain credibility confidence in these guarantees presumably alters the size of the financial sector but observing the long run consequences of failed guarantees is difficult we look to america s free banking era and compare the consequences of a broken guarantee during the indiana centered panic of 1854 to the panic of 1857 in which guarantees were honored our estimates of a model of endogenous market structure indicate substantial negative long run consequences to financial depth when panics cast doubt upon a government s ability to honor its guarantees

the price concentration relationship in banking the commonly observed positive correlation between market concentration and profitability may be explained by noncompetitive pricing behavior as argued by the structure performance hypothesis or by the greater efficiency of firms with dominant market shares as argued by the efficient structure hypothesis by examining the price concentration relationship instead of the profit concentration relationship this paper tests the structure performance hypothesis in a manner that excludes the efficient structure hypothesis as an alternative explanation of the results the results strongly support the structure performance hypothesis and are robust with respect to model specification measurement of concentration and econometric technique copyright 1989 by mit press