Transparency and Bidding Competition in International Wheat Trade |
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| Authors: | William W Wilson Bruce L Dahl |
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| Institution: | Professor, Department of Agribusiness and Economics, North Dakota State University, Fargo, North Dakota.;Research scientist, Department of Agribusiness and Economics, North Dakota State University, Fargo, North Dakota. |
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| Abstract: | One of the trade policy issues identified by U.S. interests, including grower groups, traders and policy makers, is price transparency. This has been a point of contention between the United States and Canada as well as other exporting countries with state trading enterprises (STEs). The transparency problem generally refers to the inability to observe terms of trade (including price, quality, credit, etc.)offered by STEs, and the potential strategic advantage this provides in bidding competition. A game theory model of import tendering is developed in this paper to examine the effects of information asymmetry among rivals. Several stylized examples are used to illustrate aspects of competition and to analyze effects on bidding strategies. Results indicate that: |
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