Alternative Policy Responses to Increased Use of Formula Pricing

摘要: This article determines the potential effects of policies to address concerns about lower producer prices due increased use marketing agreements. Policies considered are banning alternative agreements, compensating producers who sell on cash market, and restricting quantity We an agent-based model in a common-value auction framework analyze these policies. The is used because it closely resembles how livestock actually purchased. find equilibrium. A ban agreements reduces social welfare other policy interventions have little effect prices. Past theoretical studies predict will cause large reductions paid producers. Conversely, empirical show slight effects. offers theory that more matches markets our results reduce gap between research. predicts negative close those found past