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Full-Text Articles in Social and Behavioral Sciences
The Tradeoff Between Oligopsony Power And Cost Efficiency In Horizontal Consolidation: An Example From Beef Packing, John Schroeter, Azzeddine Azzam
The Tradeoff Between Oligopsony Power And Cost Efficiency In Horizontal Consolidation: An Example From Beef Packing, John Schroeter, Azzeddine Azzam
Azzeddine Azzam
In this paper, the authors model the trade-off between regional oligopsony power and cost efficiency resulting from consolidation in a food processing industry. The model can be used to calculate the cost reductions necessary to offset the anticompetitive effects of market power and to compare them to actual cost savings achieved through plant scale or multiplant operating economies. For an application, the authors choose the beef packing industry. For this case, they find that the estimated cost savings necessary to neutralize the anticompetitive effects of consolidation in beef packing are about half the actual cost savings from scale economies.
A Spatial Model Of Optimal Water Conveyance, Ujjayant N. Chakravorty, Eithan Hochman, David Zilberman
A Spatial Model Of Optimal Water Conveyance, Ujjayant N. Chakravorty, Eithan Hochman, David Zilberman
Ujjayant Chakravorty
Most water projects suffer from losses in conveyance. Because conveyance has public good characteristics, investment in reducing conveyance losses must be provided by a central authority. This paper develops a spatial model to determine optimal conveyance investment, water allocation, and investment in firm-specific conservation technology. The efficiency and distributional characteristics of the optimal solution are compared to projects with (i) well-developed water markets and (ii) spatially uniform water prices, both with sub-optimal conveyance. A numerical illustration is provided.