Market Transparency and Market Structure: The Livestock Mandatory Reporting Act of 1999 |
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| Authors: | Azzeddine Azzam |
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| Affiliation: | Azzeddine Azzam is professor and director of the Center for Agricultural and Food Industrial Organization, Department of Agricultural Economics, University of Nebraska-Lincoln and adjunct professor, Department of Economics, Swedish University of Agricultural Sciences (SLU), Uppsala, Sweden. |
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| Abstract: | The premise of the Livestock Mandatory Reporting Act of 1999 is that enhanced transparency promotes competition. This article provides a theoretical study of the consequences of such transparency for the structure, conduct, and performance of the livestock industry. I conclude that the usefulness of the Act to the livestock industry may not be in the value of reported information to feeders, as the supporters of the Act claim. Rather, by forcing packers to pool information at negligible marginal cost, the Act may foster more competitive conduct in the procurement of livestock. |
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| Keywords: | comparative statics consistent conjectures information pooling livestock markets mandatory price reporting oligopsony |
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