Hostname: page-component-848d4c4894-sjtt6 Total loading time: 0 Render date: 2024-06-23T06:59:52.107Z Has data issue: false hasContentIssue false
  • English
  • Français

Experimental Examination of a Thin Market: Price Behavior in a Declining Terminal Market Revisited

Published online by Cambridge University Press:  28 April 2015

Robert G. Nelson  and
Steven C. Turner
Robert G. Nelson
Affiliation:
Department of Agricultural Economics and Rural Sociology, Auburn University
Steven C. Turner
Affiliation:
Department of Agricultural and Applied Economics, University of Georgia
Get access Rights & Permissions [Opens in a new window]

Abstract

Perceived characteristics of thin markets are described and approaches to furthering their study are suggested. Design features of a laboratory thin market, patterned after a typical livestock marketing situation, are described. Price bias and variation from a “thick” private negotiation market with 22 traders is compared to that from a “thin” auction market with 8 traders. No systematic price bias was found in any of the markets. Price variation was actually lower in the thin auction market.

Keywords

auctionexperimental economicsprice discoverythin market
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 27 , Issue 1 , July 1995 , pp. 149 - 160
Copyright
Copyright © Southern Agricultural Economics Association 1995

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adam, B.D., Hudson, M.A., Leuthold, R.M., and Roberts, C.A.. “Information, Buyer Concentration, and Risk Attitudes: An Experimental Analysis.” Rev. Agr. Econ. 13(1991 ):59–71.CrossRefGoogle Scholar
Azzam, A., and Schroeter, J.. “Implications of Increased Regional Concentration and Oligopolistic Coordination in the Beef Packing Industry.” W. J. Agr. Econ. 16(1991):374–381.Google Scholar
Azzam, A., and Pagoulatos, E.. “Testing Oligopolistic and Oligopsonistic Behavior: An Application to the U.S. Meat Packing Industry.” J. Agr. Econ. 41(1990):362–370.CrossRefGoogle Scholar
Bessler, D.A., and Covey, T.. “On the Search for Econometric Structure in Agriculture.” Amer. J. Agr. Econ. 75(1993):41–47.CrossRefGoogle Scholar
Buccola, S.T. “Pricing Efficiency and Information Use in Risky Markets.” Amer. J. Agr. Econ. 66(1984):711–716.CrossRefGoogle Scholar
Bums, P. “Market Structure and Buyer Behavior: Price Adjustment in a Multi-Object Progressive Oral Auction.” J. Econ. Behav. and Org. 6( 1985):275–300.Google Scholar
Davis, D.D., and Holt, C.A.. Experimental Economics. Princeton, NJ: Princeton University Press, 1993.CrossRefGoogle Scholar
Faminow, M.D., and Benson, B.L.. “Price Reporting in Experimental Markets.” Canadian J. Agr. Econ. 35(1987):357–371.CrossRefGoogle Scholar
Gray, R.W. “The Characteristic Bias in Some Thin Futures Markets.” Food Research Institute Studies 1(1960):296–312.Google Scholar
Grossman, S.J., and Hart, O.D.. “The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration.” J. Polit. Econ. 94(1986):691–719.CrossRefGoogle Scholar
Hayenga, M.L. (editor). Pricing Problems in the Food Industry (with Emphasis on Thin Markets). NC-117 Monograph 7, North Central Regional Research Publication No. 261, 1979.Google Scholar
Hayenga, M.L., Gardner, B.L., Paul, A.B., and Houck, J.P.. “The Concept of a Thin Market.” Pricing Problems in the Food Industry (with Emphasis on Thin Markets), ed. Hayenga, M.L., NC-117 Monograph 7, North Central Regional Research Publication No. 261, 1979.Google Scholar
Kirman, A., and Vignes, A.. “Price Dispersion: Theoretical Considerations and Empirical Evidence from the Marseilles Fish Market.” Issues in Contemporary Economics, Vol I. ed. Arrow, K.J., New York: New York University Press, 1991.Google Scholar
Kohls, R.L., and Uhl, J.N.. Marketing of Agricultural Products, 7th ed. New York: Macmillan Publishing Co., 1990.Google Scholar
Koontz, S.R., Garcia, P., and Hudson, M.A.. “Meatpacker Conduct in Fed Cattle Pricing: An Investigation of Oligopsony Power.” Amer. J. Agr. Econ. 75(1993):537–548.CrossRefGoogle Scholar
Menkhaus, D.J., St. Clair, J.S., and Ahmaddaud, A.Z.. “The Effects of Industry Structure on Price: A Case in the Beef Industry.” W. J. Agr. Econ. 6(1981):147–153.Google Scholar
Plott, C.R. “An Updated Review of Industrial Organization: Applications of Experimental Methods.” Handbook of Industrial Organization, Volume II. eds. Schmalensee, R. and Willig, R. D., Amsterdam: North-Holland, 1989.Google Scholar
Plott, C.R., and Smith, V.L.. “An Experimental Examination of Two Exchange Institutions.” Rev. Econ. Stud. 45(1978): 133–153.CrossRefGoogle Scholar
Purcell, W.D. “Pricing and Competition in Concentrated Livestock Markets.” Pricing and Coordination in Consolidated Livestock Markets, ed. Purcell, W.D., Blacksburg, VA: Research Institute on Livestock Pricing, 1992.Google Scholar
Quail, G., Marion, B., Geithman, F., and Marquardt, J.. The Impact of Buyer Concentration on Live Cattle Prices. Madison, WI: NC-117 Project, Working Paper 89, 1986.Google Scholar
Rhodus, W.T., Baldwin, E.D., and Henderson, D.R.. “Pricing Accuracy and Efficiency in a Pilot Electronic Hog Market.” Amer. J. Agr. Econ. 71(1989):874–882.CrossRefGoogle Scholar
Schroeter, J.R. “Estimating the Degree of Market Power in the Beef Packing Industry.” Rev. Econ. Stat. 70(1988): 158–162.CrossRefGoogle Scholar
Schroeter, J.R., and Azzam, A.. “Measuring Market Power in Multi-Product Oligopolies: The U.S. Meat Industry.” Applied Econ. 22(1990): 1365–1376.CrossRefGoogle Scholar
Smith, V.L. “Experimental Economics: Induced Value Theory.” Amer. Econ. Rev. 66(1976):274–279.Google Scholar
Smith, V.L. “Effect of Market Organization on Competitive Equilibrium.” Quart. J. Econ. 78(1964): 181–201.CrossRefGoogle Scholar
Stiegen, K.W., Azzam, A., and Brorsen, B.W.. “Markdown Pricing and Cattle Supply in the Beef Packing Industry.” Amer. J. Agr. Econ. 75( 1993):549–558.CrossRefGoogle Scholar
Telser, L.G.Economic Theory and the Core. Chicago: University of Chicago Press, 1978.Google Scholar
Thompson, S.Including Transactions Costs as a Component of the Marketing Margin: Implications for Performance. Series E, No. 88 E-419, Department of Agricultural Economics, University of Illinois, Urbana, IL, 1988.Google Scholar
Tomek, W.G. “Price Behavior on a Declining Terminal Market.” Amer. J. Agr. Econ. 62(1980):434–444.CrossRefGoogle Scholar
Tomek, W.G., and Robinson, K.L.. Agricultural Product Prices, 3rd ed. Ithaca, NY: Cornell Univ. Press, 1990.Google Scholar
Ward, C.E. “Structural Change: Implications for Competition and Pricing in the Feeder-Packer Subsector.” Structural Change in Livestock: Causes, Implications, Alternatives, ed. Purcell, W.D., Blacksburg, VA: Research Institute on Livestock Pricing, 1990.Google Scholar