Competition in the Japanese wholesale potato market

Abstract

The Japanese potato market is characterized by regional domination of production and marketing by strong cooperatives exhibiting a high degree of concentration with potential oligopolistic market power. In this research, the level of competition in the Japanese potato market was evaluated using conjectural variations technique on the time series data from 1989 to 1995. Four wholesale markets with eight production sources were analyzed. From the empirical analysis, it can be concluded that, despite the high level of concentration in production, all producing regions including the dominant producer, Hokkaido, seem to have behaved competitively. However, the degree of competition is found to vary depending on the season. Hokkaido, the leading producer, may be setting prices close to marginal costs under pressure of competition from foreign suppliers. {Econ-Lit citations: L100, L130] © 2001 John Wiley & Sons, Inc.