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A Dynamic Model of Oligopoly in the Coffee Export Market
Author(s) -
Karp Larry S.,
Perloff Jeffrey M.
Publication year - 1993
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 - 10.2307/1242929
Subject(s) - oligopoly , generalization , economics , subgame perfect equilibrium , quadratic equation , cournot competition , dynamic efficiency , econometrics , microeconomics , mathematical economics , mathematics , game theory , macroeconomics , mathematical analysis , geometry
A linear‐quadratic, dynamic feedback oligopoly model that nests various market structures is used to estimate the degree of competitiveness and the adjustment paths of the two largest coffee exporters, Brazil and Colombia. Their estimated behavior is relatively competitive. This subgame perfect dynamic model is compared to a standard static oligopoly model and the open‐loop model (the dynamic generalization of the standard static model). Both classical and Bayesian tests of open‐loop and feedback dynamic models are reported.