The Competitive Implications of Top-of-the-Market and Related Contract-Pricing Clauses

摘要: This article examines the competitive implications of contract pricing arrangements, which link price to subsequent cash price. We focus on so-called “top-of-the-market pricing” (TOMP) in cattle procurement. The TOMP clause is shown have anticompetitive consequences when same buyers who purchase with also compete procure spot market. reduces packers' incentives aggressively Although not producers' collective interest, rational sellers may nonetheless sign these contracts little or no financial inducement.