SIMULATING THE IMPACTS OF CONTRACT SUPPLIES IN A SPOT MARKET-CONTRACT MARKET EQUILIBRIUM SETTING

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dc.creatorJaenicke, Edward C.
dc.creatorWang, Yanguo
dc.date2017-04-01T15:37:59Z
dc.date.accessioned2026-07-09T03:30:59Z
dc.descriptionThis paper embeds a principal-agent model of producer-processor equilibrium within a market equilibrium model of contract and cash markets to analyze the impact of contracting on the spot market for hogs. The principal-agent model incorporates both quality differentiation in the contract market and an endogenously determined cash market price to account for processor-producer relationships in equilibrium. For five types of contracting scenarios, market equilibrium conditions are derived, and results are presented for a numerical example. Contrary to previous results, the paper finds that the increased supply of hogs under typical formula-price contracts can increase the cash market price and reduce its variance.
dc.identifierdoi:10.22004/ag.econ.20313
dc.identifierhttps://ageconsearch.umn.edu/record/20313/files/sp04wa02.pdf
dc.identifierhttp://ageconsearch.umn.edu/record/20313
dc.identifier.urihttp://hdl.handle.net/123456789/533973
dc.languageeng
dc.publisher
dc.sourcehttp://ageconsearch.umn.edu/record/20313
dc.titleSIMULATING THE IMPACTS OF CONTRACT SUPPLIES IN A SPOT MARKET-CONTRACT MARKET EQUILIBRIUM SETTING
dc.typeText

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