intertemporal cost dependence in the presence of managerial impatience abstract a multi period agency problem arising in the presence of intertemporal cost dependence is investigated the principal delegates production decisions to a manager who is impatient the manager has private information on the nature of cost dependence that takes the form of an experience effect since the impatient manager would not invest enough to gain experience the principal designs a second best scheme to motivate the manager to increase intertemporal profit for the firm the second best scheme is obtained as a direct revelation mechanism that specifies outputs prices as well as the manager s compensation a significant result is that unlike the first best case impatience is not necessarily a disadvantage with asymmetric information impatience can be exploited to reduce the manager s information rent resulting in preferred outcomes for the principal

has discrimination lessened over time a test using baseball s all star vote i introduction the objective of this analysis is to examine changes in racial discrimination over time the labor market literature indicates that black white wage differentials have declined substantially in the last 45 years and most of that decline came before 1980 1 however the degree to which this was due to altered attitudes among whites increased productivity among blacks or corrective legislation is debated 2 most studies are not able to effectively test the hypothesis of changes in attitudes as attitudes are very difficult to observe some activities may be very indicative of attitudes though take voting for baseball s annual all star game each all star vote is cast anonymously the voter gets neither praise nor censure the cost of voting is low ballots are freely supplied at ballparks and filling them out takes but a minute or two to a large degree the reward is in the voting itself the voter is able to express his her opinion on an issue of interest there are no rules to be followed a fan can vote for a player because of his ability reputation performance team age appearance color or anything else the all star vote is as close to a pure expression of preference as is likely to be found if fans prefer white players to black all else equal black players should receive fewer votes than equivalent whites if those preferences change the vote differential should change in tandem this is the test that this article applies in an examination of all star voting from 1970 to 1996 baseball has long been a useful source of discrimination studies it has a clear and unambiguous history of discrimination in which owners players and fans have all been implicated 3 there are two particular advantages in looking to baseball for evidence of changes in discriminatory attitudes baseball has not been as directly influenced by the equal opportunity and affirmative action laws that are argued to have helped close the black white wage gap and baseball productivity can be controlled for in a relatively precise fashion while changes in the wage gap may have a variety of causes changes in an all star vote gap more plausibly reflect changes in attitudes therefore if we find the variance in all star votes unexplained by other factors and correlated with race has shrunk over time we will take it as support for the hypothesis that discriminatory attitudes have weakened the article will proceed as follows section ii discusses the all star vote and the underlying model section iii presents the analysis section iv concludes ii the all star game baseball s all star game has been played every year and twice per year for a short period since 1933 with the exception of the war year of 1945 it is held in the middle of the season and pits the best players from each of major league baseball s mlb two leagues the national and the american against each other various methods of selecting all star teams have gone in and out of vogue the game was first established through the efforts of arch ward sports editor of the chicago tribune as a special part of the 1933 chicago world s fair ballots were printed in the tribune and in several other major newspapers and fans voted for their favorite stars fan voting was dropped two years later in favor of selection by baseball s managers only to be re instituted in 1947 and abandoned a second time after ballot stuffing by cincinnati reds fans led to the election of seven reds to the starting line up in 1957 from 1958 to 1969 the starting all star line ups were chosen by a vote of the players themselves in 1970 baseball commissioner bowie kuhn re established the fan vote amid much ballyhoo the new system was a popular success and has remained in place ever since this study analyzes and compares fan votes over 26 years it begins with 1970 the year that the fan vote was re established ends with 1996 and fills in the middle with the votes of 1971 1973 1975 1977 1979 1980 1985 and 1990

why do black basketball players work more for less money abstract we explore kahn and sherer s finding that national basketball association players salaries are lower for black than white players in general we do not find evidence that this salary differential is due to the racial preferences of fans specifically we observe that black players actually play more than comparable white players we offer a theory of price discrimination based on relative supplies and supply elasticities in lieu of the racial discrimination argument as an explanation for the black white wage differential

marketing margins and price uncertainty the case of the u s wheat market this paper seeks to determine the effect of changes in output price risk on marketing margins a theoretical model of price determination in a marketing channel with risk averse firms is developed this model shows that if marketing firms are competitive and decreasingly absolute risk averse then an increase in output price risk should result in higher expected marketing margins empirical evidence from the wheat marketing channel supports the theoretical model increased price variability significantly increases wheat marketing margins for both the farm mill margin and the mill retail margin these results suggest a potential benefit from price stabilization programs

customer racial discrimination in major league baseball most studies of racial discrimination concentrate on identifying the existence rather than the source of discrimination in contrast this paper tests directly for racial discrimination by major league baseball customers by examining the market for baseball cards in tobit regressions the market prices of cards consistently reflect player performance records and other demand variables when interactive race productivity variables are included in the models a significant and complex pattern of fan discrimination against black pitchers and black hitters is found discrimination against latin players is not found

markdown pricing and cattle supply in the beef packing industry we determine the effect of anticipated and unanticipated cattle supply on the departure of fed cattle price from cattle s marginal value product results indicate fed cattle were priced significantly below their marginal value during 31 of the 59 quarters between 1972ii and 1986iv when unanticipated supply shocks are small markdown behavior is consistent with the hypothesis that packers follow an average processing cost apc pricing rule one implication of our results is that reducing industry concentration is not likely to lead to changes in cattle prices predicted by scp based studies of the industry

measuring market power in multi product oligopolies the us meat industry this paper develops and estimates an economic model for measuring market power in a quantity setting oligopoly engaged in the joint production of demand related goods the model which allows for firms conjectures about both same and cross market responses to own output variation is applied to the us meat beef and pork industry he hypothesis that the industry s equilibrium reflects price taking behaviour is rejected the hypothesis of no cross effects cannot be rejected roughly half of the farm to retail price spreads for beef and pork appear to be attributable to market power

risk response in the beef marketing channel a multivariate generalized arch m approach a model of the farm retail price spread for beef is specified under rational expectations in which systematic risk response on the part of marketing intermediaries is allowed the three equation structural model contains potentially time varying risk terms in margin and supply equations which i approximate and estimate using a multivariate garch in mean approach the estimated model is used to infer relative risk premia in beef margins and to simulate short run equilibrium risk effects results indicate that price risk has at times had substantial impacts on farm and retail beef prices and production

voting behavior discrimination and the national baseball hall of fame we investigate whether black latin and white major league baseball players receive the same consideration by the baseball writers association of america in voting for membership into the national baseball hall of fame the first stage of heckman s two step procedure indicates that the probability a black player will ever receive at least one vote is significantly lower than that for his white counterpart the second stage suggests that race or ethnicity sometimes matter in determining the number of votes a candidate receives for hall of fame membership jel j7 d72

risk behavior and rational expectations in the u s broiler market this study examines the empirical implications of extending the rational expectations hypothesis reh to include price uncertainty a general estimation framework that incorporates both the restrictions on structural parameters and the variance covariance terms is developed garch time series processes are used to generate time varying expectations of both the means and the variances of exogenous variables the empirical application is with a quarterly model of the u s broiler industry the results indicate that the rational expectation of price variance is an important determinant of broiler supply a formal test indicates that the restrictions implied by the reh cannot be rejected

equilibrium evolution and learning abstract in their evolutionary theory of economic change nelson and winter 1982 developed a model based on winter 1971 in which agents have limited information processing capacities nelson s and winter s belief that the model would always generate a static selection equilibrium is shown to be incorrect despite that error simulation experiments based on their model yield a number of interesting implications about the effects of learning on evolutionary mechanisms when decision makers learn simulated competitive industries are much less volatile than when they do not moreover the most orthodox results are found when entry is difficult and there are large fixed costs of production perfect contestability implies extreme volatility

customer racial discrimination in the market for memorabilia the case of baseball because consumer discrimination can reduce productivity it is often impossible to tell whether differential productivity is the effect of discrimination or of differential ability detailed data for the sports labor market make it possible to separate consumer discrimination from ability we use a unique approach to determine whether the entertainment value of baseball players is related to their race we examine whether race directly affects the value of a player in the market for baseball cards in contrast to studies that use salaries there is no room for owner or coworker discrimination our evidence supports the hypothesis of consumer discrimination

the seed and agricultural biotechnology industries in india an analysis of industry structure competition and policy options since the late 1980s technological advances and policy reforms have created new opportunities for private sector investment in india s seed and agricultural biotechnology industries these changes have had a significant impact on cotton yields and output in india but less so for rice and wheat the country s main cereal staples for which yield growth rates are tending toward stagnation this analysis examines the structures of these industries their potential effects on competition and innovation and the policies that may improve both industry performance and the delivery of new productivity enhancing technologies to india s cereal production systems our findings suggest that more substantive policy reforms are needed to encourage further innovation reduce regulatory uncertainty and encourage firm and industry level growth while continued public spending on agricultural research is needed to support technological change

measurement of technological and market structure alternative methodological perspectives discussion all three of the papers in this session lived up to the promise of delivering alternative methodological perspectives but only that of paul and muth and wohlgenant came close to providing a framework for measurement of technological and market structure perhaps a more fitting and inclusive title of the session in light of goodwin and holt s contribution would be technology market structure and price adjustment in the beef marketing channel beef is added because it is on the menu of each of the papers taken together the three papers are timely and important in view of the ongoing changes in market structures and organization of the livestock sector taken individually the degree to which each paper furthers our understanding of those changes varies with the type of issues raised and methodological perspective offered

measuring market power and cost efficiency effects of industrial concentration in this paper i show how appelbaum s framework for testing price taking behavior in a single industry can be formally extended to consider concentration explicitly in so doing i separate the market power effect of concentration from its cost efficiency effect data from the us beef packing industry are used to illustrate an empirical application of the model the findings support oligopsonistic market power and slaughter cost efficiency in the industry however the cost efficiency effect outweighs the market power effect

market power and the cattle cycle the relationship between the dynamic cattle cycle and the potential for market power in cattle purchases has rarely been studied this paper provides a conceptual framework showing how the cattle cycle and buyer market power are related not only does a larger cattle stock lead to a lower fed cattle price but the cattle stock s negative effect on price is magnified by the degree of buyer market power in cattle procurement empirical findings support the posited theoretical relationships and help explain why previous researchers reached different conclusions regarding the extent of market power in the industry copyright 2010 oxford university press

market and welfare effects of the u s livestock mandatory reporting act author affiliation kenneth njoroge department of accounting the fuqua school of business duke university box 90120 durham nc 27708 0120 usa kn14 duke eduamalia yiannaka department of agricultural economics 314d filley hall university of nebraska lincoln lincoln ne 68583 0922 usa yiannaka unl edukonstantinos giannakas department of agricultural economics 216 filley hall university of nebraska lincoln lincoln ne 68583 0922 usa kgiannakas unl eduazzeddine m azzam department of agricultural economics 103b filley hall university of nebraska lincoln lincoln ne 68583 0922 usa aazzam1 unl edu corresponding author acknowledgment senior authorship is shared authors names appear in reverse seniority order 1 introductionthe livestock mandatory reporting act the act was enacted in 2001 to provide market participants with information on all cash and noncash transactions reported by packers to the agricultural marketing service ams on a daily basis the information is aggregated under specific confidentiality guidelines1 to preserve the anonymity of the source2 and published in the mandatory livestock and meat market news reports reports 3 ams is responsible for setting the confidentiality guidelines as well as for enforcing the act as stated in the act federal register 2000 the reports intend to provide information that can be readily understood by producers packers and other market participants improve the price and supply reporting services of the department of agriculture and encourage competition in the marketplace for livestock and livestock products the rationale is that as more animals have been purchased under marketing arrangements neither the arrangements nor the final purchase prices are publicly disclosed 4about two years after the act went into effect schroeder grunwald and ward 2002 reviewed the early literature on livestock mandatory reporting lmr a consensus appeared to be forming that while lmr could be beneficial by reducing uncertainty and increasing competition in cattle markets revealing too much information about rival pricing could facilitate collusion and reduce competition among packers schroeder grunwald and ward 2002 p 11 the uncertainty reducing effect of lmr was deduced from two experimental studies by anderson et al 1998 and bastian koontz and menkhaus 2001 in the first experiment price and quantity information in the fed cattle market simulated through the fed cattle market simulator fcms 5 was varied and market outcomes were observed uncertainty measured by price dispersion was found to increase with the amount and type of information withheld in the second experiment also using the fcms market participants were provided with price and quantity information on cattle sold through the spot markets as well as through forward contracts the authors observed a substantial reduction in the variance of forward contract prices the effect of the forward market information on the variance of spot prices was negative but not statistically significant maintaining the hypothesis that mandatory reporting reduces uncertainty through the provision of more information azzam 2003 studied the effects of the reduction in uncertainty on the structure conduct and performance of livestock markets azzam s theoretical findings suggest that in a setting where cattle feeders and packers are risk averse and packers hold consistent conjectures increased transparency due to mandatory reporting promotes competition and results in higher livestock prices however since increased transparency can make it easier for packers to collude wachenheim and devuyst 2001 azzam s assumption of consistent conjectures is restrictive because it rules out the possibility of collusion njoroge 2003 provides a formal model of collusion that is in line with the arguments in wachenheim and devuyst 2001

racial discrimination in professional basketball evidence from nielsen ratings using data on nielsen ratings for locally televised nba basketball games we find strong evidence that viewership increases when there is greater participation by white players this finding controls for a wide variety of other factors that could systematically affect nielsen ratings and signifies the presence of customer discrimination in the market for nba players we also find that higher nielsen ratings allow nba teams to realize greater advertising revenues meaning that the marginal revenue product of white players exceeds that of comparable black players this factor explains much of the race based salary gap that exists in professional basketball

testing the monopsony inefficiency incentive for backward integration in theory monopsony at one stage in a vertically related market provides an incentive for backward integration into the adjacent competitive stages by integrating backward a monopsonist internalizes the monopsony inefficiency due to underemployment of the factor produced upstream however little is known about the importance of such incentive in practice in this paper i provide an empirically implementable model to test the monopsony inefficiency incentive for vertical integration for illustration the model is applied to the u s beef slaughter industry findings seem to support the monopsony inefficiency incentive for backward integration by the industry into the live cattle market

variety and superstardom in popular music i introduction alfred marshall 1947 and irving fisher 1925 73 both believed that as average incomes increase the increase in the demand for quality goods and services will be greater than for those goods and services regarded as having lower quality in addition marshall pointed out that innovations in technology and mass production such as those taking place at the turn of the century would lower the per unit price of quality goods and ultimately allow the higher quality goods to capture a greater share of the market rosen 1981 1983 has termed this the superstar phenomenon marshall added a specific view that this situation had not occurred in the field of professional singers since at that time there were insufficient innovations for low cost mass production of sound rosen 1981 857 has suggested that subsequent innovations have since made the field of professional singers i e the recording industry a likely candidate for the superstar phenomenon in a recent paper hamlen 1991 provided some initial empirical evidence which indicates that the modern recording industry for popular music i e 1955 1987 fell short of the predicted marshall rosen superstar phenomenon in that study it was shown that while consumers of popular music recognized differences in quality as measured by an external objective measurement and there was an increase in total record earnings by singers with greater measured levels of ability the increase in these earnings was less than proportional to the increase in ability this would indicate that the marshall rosen concept of superstardom did not hold empirically during the period however there was no attempt in that paper to analyze why the superstar phenomenon failed to occur in a profession that has been viewed in the superstar literature as one of the most likely candidates since the knowledge of quality differences in performers is highly dependent on the transmission of information among different consumers some economists have tried to hypothesize a more precise market scenario to explain how performers with greater talent rise to stardom macdonald 1988 offered a model which he believes is relevant for musicians and singers it is based on a dynamic information accumulation process with multiple market levels singers begin in the entry level market where they compete mostly as unknowns here they share the revenues from lower income consumers who also have lower opportunity costs of time and therefore can afford to listen to many singers of relatively poor quality however in this entry level market some singers exhibit relatively high quality and receive above average success these higher quality singers are then given the opportunity to compete successfully in more select markets where the consumers have higher incomes and higher opportunity costs of time in each higher market level consumers are willing to pay a premium to listen to only the higher quality singers i e those filtered out from the lower market levels under reasonable assumptions macdonald s multi market processes can produce the superstar phenomenon described above adler 1985 pointed out a possible flaw in superstar models such as macdonald s the quality filter described above may be an imperfect filter with both type one errors some high quality singers do poorly and type two errors some lower quality singers do well adler believes that factors other than talent also determine the success and failure of singers these factors consist of those attributes which cannot be directly described as a measure of quality while some of these other factors are measurable and comparable e g musical style sex or race many may never be identified or measured e g charisma song delivery good looks etc the presence and importance of all of these other factors both measurable and nonmeasurable make up the demand for variety and tend to alter the simple relationship between quality ability and success

estimating the degree of market power in the beef packing industry a technique for assessing the degree of monopoly power developed by appelbaum 1979 1982 is extended here to permit measurement of monopsony power as well data from the u s beef packing industry are examined the results reveal small but statistically significant monopoly monopsony price distortions in slaughter cattle and wholesale beef markets but in spite of a recent trend toward heightened concentration in the industry give no indication that performance has become appreciably less competitive of late this abstract was borrowed from another version of this item

imperfect competition in multiproduct food industries with application to pear processing agricultural product markets often involve relatively few firms processing a farm product into multiple processed products this market structure prompts concern that processing firms may exercise both oligopsony and oligopoly power the present paper develops and applies a methodology to test simultaneously for market power in both the raw input market and multiple processed output markets application of the methodology to california pear processing indicates the industry has exerted power in both its farm input market and the markets for canned pears and fruit cocktail

customer discrimination in professional basketball evidence from the trading card market this paper presents evidence on the existence of customer racial discrimination in professional basketball from recent prices for the trading cards of former players in the national basketball association data were collected on the 258 active roster players in the nba during the 1976 77 season 133 of whom had cards issued that year maximum likelihood estimation of a card price equation is carried out accounting both for the nonrandom selection of the players for whom cards exist and for left censoring of the dependent variable overall the empirical results suggest the absence of customer racial discrimination in the pricing of basketball trading cards however there is some evidence that the effect of career length on trading card prices is lower for whites than for blacks and that the card price premium for players who subsequently coached in the nba is lower for blacks than for whites

marketing margins market power and price uncertainty this paper provides a conceptual and empirical framework for analyzing marketing margins in a noncompetitive food processing industry facing output price uncertainty the framework allows the decomposition of observed margins into components reflecting the marginal cost of the processing industry oligopoly oligopsony price distortions and an output price risk component the empirical procedure is applied to a time series of spreads between wholesale pork prices and farm prices of market hogs the principal finding is that while farm wholesale margins are more consistent with competitive performance now than they were fifteen years ago the output price risk component persisted throughout the sample period

competition in the us meatpacking industry is it history the us meatpacking industry has become concentrated to a degree not experienced since the days of the beef trust a century ago a number of mainstream studies have investigated if such concentration has been detrimental to competition just as earlier studies may have helped shape competition policy towards meatpacking a century ago contemporary studies have made their way into current discussions and may shape competition policy at the turn of this century this paper asks whether or not contemporary studies are useful in informing competition policy after comparing how competition looks from the econometric vantage point with how it looks from the vantage point of the industry s 300 yr history this article concludes that mainstream studies are more useful for a competition policy targeting conduct rather than structure

regime switching and oligopsony power the case of u s beef processing in this article we estimate a model of oligopsony behavior under imperfect monitoring of rival actions to analyze weekly marketing margin data for the u s beef packing industry oligopsonists are hypothesized to follow a discontinuous pricing strategy in equilibrium and we focus on shocks in the normal throughput of supply as a potential catalyst for regime switching between cooperative and noncooperative phases we adopt an algorithm developed by bellone 2005 that relies on hamilton s 1989 multivariate first order markov process to test for the cooperative noncooperative switching behavior we find strong evidence that links switching conduct by packers to disruptions in coordinating the derived demands for processed beef with the supply of live cattle once switched cooperative regimes lasted an average of 21 weeks while noncooperative regimes averaged 33 weeks the average marketing margin for processed beef was 68 lower in the noncooperative regimes compared to the cooperative regimes this led to an annual average increase in profits of 408 million dollars to the beef packing industry and about an 8 9 reduction in live cattle prices

asymmetric farm retail price transmission and market power a new test a finite mixture model is used to estimate farm retail price transmission in the us fresh strawberry market results suggest two distinct pricing regimes associated with off and peak harvesting seasons the market power parameter is significant in the peak harvest regime but not in the off peak regime moreover price changes are transmitted completely throughout the marketing channel in the off peak regime when the market power parameter is zero but not in the peak harvest regime when the market power parameter is positive this suggests that produce buyers are more apt to exercise market power when farm supplies are abundant than when they are scarce and that the exercise of such power causes the farm retail price linkage to become asymmetric

the dynamics of international differentiation a multi country evolutionary model the paper presents some admittedly preliminary results on evolutionary modeling of open economies interactions the dynamics is microfounded in a multiplicity of boundedly rational agents who imperfectly learn how to innovate in environments characterized by notionally unlimited opportunities micro discoveries is shown can generate persistent system level effects despite the absence in the model of any institutional specificity of individual countries processes of innovative exploration and imitation yield international divergence less often convergence catching up and falling bebind

a critical assessment of supply demand models of agricultural trade we offer a critical assessment of static deterministic reduced form supply demand sd models of agricultural trade a commonly used and well documented model has significant limitations no explicit treatment of factor mobility between farm and nonfarm sectors nonzero profits in some sectors no substitutability among feedstuffs in livestock sectors violation of the law of one price small marketing margins for some commodities and incomplete coverage of the agricultural sector such limitations have significant impacts on the magnitude and direction of projected world price and welfare changes we believe agricultural policy analysis should first focus on the remediation of these limitations before proceeding to more complex issues like dynamics and uncertainty