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Market Power in International Commodity Trade: The Case of Coffee.
- Source :
- Journal of Industrial Economics; Jun2015, Vol. 63 Issue 2, p225-248, 24p, 4 Charts, 3 Graphs
- Publication Year :
- 2015
-
Abstract
- This paper studies the impact of market power on international commodity prices. I use a standard oligopoly model and exploit historical variations in the structure of the international coffee bean market to assess the impact of a cartel treaty on coffee prices and its global welfare consequences. The results suggest that the International Coffee Agreement ( ICA, 1965-89) raised its price by 75% above the Cournot-competitive level, annually transferring approximately $12 billion from consumers to exporting countries, and its lapse in 1989 explains four-fifths of the subsequent price decline, that is, the 'coffee crisis.' [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00221821
- Volume :
- 63
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Journal of Industrial Economics
- Publication Type :
- Academic Journal
- Accession number :
- 103224614
- Full Text :
- https://doi.org/10.1111/joie.12076