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Buyer Concentration in Markets for Developing Country Exports
Author(s) -
Deardorff Alan V.,
Rajaraman Indira
Publication year - 2009
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2008.00481.x
Subject(s) - economics , monopsony , distortion (music) , commodity , partial equilibrium , developing country , general equilibrium theory , market power , international economics , monetary economics , microeconomics , market economy , monopoly , amplifier , cmos , electronic engineering , engineering , economic growth
The authors explore the implications of buyer concentration in markets for primary commodity exports of developing countries. Simple partial equilibrium models of monopsony and oligopsony show that the best available policy for the exporting country may be to tax exports so as to extract some of the profits of the monopsonist, even though doing so will actually worsen the distortion caused by the buyer's market power. They also explore the general equilibrium implications of these results for factor markets and for patterns of trade.