Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264539 
Authors: 
Year of Publication: 
2021
Citation: 
[Journal:] Agricultural Economics [ISSN:] 1574-0862 [Volume:] 53 [Issue:] 3 [Publisher:] Wiley Periodicals, Inc. [Place:] Hoboken, USA [Year:] 2021 [Pages:] 481-495
Publisher: 
Wiley Periodicals, Inc., Hoboken, USA
Abstract: 
Suppliers of agricultural output incur switching costs (SCs) when choosing new buyers, allowing buyers to exercise oligopsonistic market power, as SCs help buyers to mark down prices for incumbent suppliers. This article conceptualizes the idea of SCs and suggests an empirical strategy for quantifying them through an estimation of farm supply to specific buyers. The model incorporates price differences between buyers, revealing buyers' anticipations of suppliers' SCs. The approach is applied to the Indonesian rubber market, employing a data set of daily purchasing prices and less frequent quantities of individual sales instances. Results indicate that SCs exist and are at about 3% of the farm gate price, leading to substantial redistribution from suppliers to buyers of agriculturalĀ output.
Subjects: 
Bertrand paradox
law of one price
oligopsony
rubber
switching costs
value chain analysis
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.