|
|
|
|
Title: |
Oligopsonistic Intermediate Input and Patterns
of Trade |
| Author: |
Devadoss,
Stephen; Song, Wongun |
| Author
Affiliation: |
U ID |
| Source: |
International Economic Journal, Autumn 2003, v. 17, no. 3, pp. 77-97 |
|
Publication Date: |
Autumn 2003 |
|
Abstract: |
We examine the
validities of traditional trade theorems and patterns of trade for an
economy with an oligopsonistic intermediate input. Specifically, the
model consists of two final goods, one intermediate good, and two
primary factors. One final good and the intermediate good are produced
using primary factors, capital and labor. The second final good is
produced using the intermediate good and labor. All markets operate
under perfect competition except the intermediate good market, which is
oligopsonistic. This model reflects the real world phenomena of
oligopsony power exerted by some industries (e.g., the food processing
industry) in the intermediate good purchases. Our analysis shows that
some of the traditional trade theorems and H-O trade pattern may be
overturned if the factor intensity of the competitive sector lies
between those of oligopsony and intermediate good sectors. |
|
