Oligopolistic market structure in the Japanese pistachio import market

Sayed H. Saghaian, Mahdi Asgari

Research output: Contribution to journalArticlepeer-review

Abstract

Iran is the major producer of pistachio nuts in the world. Iran dominated the international pistachio export markets until 1982, when a new competitor, the United States, emerged in the international markets. Currently, both Iran and the United States are major pistachio exporters to Japan. In this study, we address the following empirical question: Is the Japanese pistachio import market best characterized by Cournot or Bertrand duopoly competition or some other form of game? We use two historical data sets on pistachio prices and quantities imported by Japan from Iran and the United States and estimate the demand functions for these two main exporters. Considering two different strategic variables, quantity and price, full information maximum likelihood (FIML) resulted in different estimates. We used normalized likelihood ratio statistics for the model comparison. Having proper game-specific nonlinear- equation restrictions enabled us to form six alternative models. The model that best fit the data was the Stackelberg model with US quantity leadership.

Original languageEnglish
Pages (from-to)87-99
Number of pages13
JournalJournal of Agricultural and Food Industrial Organization
Volume11
Issue number1
DOIs
StatePublished - 2013

Keywords

  • Bertrand model
  • Cournot model
  • Japan
  • Likelihood ratio tests
  • Oligopolistic markets
  • Pistachio nuts
  • Stackelberg model

ASJC Scopus subject areas

  • Food Science
  • Business, Management and Accounting (all)
  • Economics and Econometrics

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