Concentration dynamics and bargaining power : a theory of two-dimensional competition in the agri-food complex
This thesis attempts to explain vertical market interaction within the food chain from a new perspective. It takes a two-stage game-theoretic framework from industrial organisation literature, and extrapolates this into the area of bargaining relationships. In turn, the inter-sectoral paradigm developed is applied to the specific area of agricultural marketing and the conventional wisdom of cooperatives is challenged. The resulting model allows new insights into such issues as countervailing market power, the dynamics of market structure and competition policy. Although the principles have been developed within the context of the U.K. food chain, they are of wider relevance. The conceptual framework developed underlines that in studying bargaining relationships and market structures the economic concept of equilibrium may be better replaced with a broader game-theoretic understanding of the market process.