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Some Consequences of Bilateral Oligopoly and Vertical Integration in Bread Markets
Author(s) -
Walsh Richard G.,
Evans Bert M.,
Birch Eleanor M.
Publication year - 1964
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1236480
Subject(s) - oligopoly , vertical integration , business , industrial organization , economics , market economy , welfare
Abstract This paper explores the relationship between changes in market structure and changes in market conduct and performance. It presents evidence as to whether grocery chains have through direct and indirect competition, improved the performance of food processing industries. In bread markets, they do not seem to have done so, at least with respect to selling costs. For bread prices, the evidence differs by region with Pacific markets showing the least improvement. Nationwide, private label bread price savings represent only a small part of the total competitive benefit consumers may reasonably expect in bread markets. The recent behavior of grocery chains in bread markets is not consistent with the broader public interest in effective price competition and efficient industrial organization. There is a need for further research into the competitive relationship between grocery chains and their supplier industries.