Commodity Differentiation Research Articles

Sustainable development of organic farming like innovation element in the system of food security of the region

The ever-increasing interest in organic farming products on the part of consumers stimulates organic producers to expand their product range and search for new markets and distribution channels. Especially demanded organic products in European countries and the United States. Increased requirements for the production of organic matter presupposes the presence of certain conditions in terms of certification of lands, technologies and quality characteristics of organic products. This, in turn, requires a regulatory and legal framework at the state level, a certification system, including the rules and procedure for certification of land and products, organizations with the right to conduct accreditation procedures, pricing and possible preferences for small businesses and the private sector of the population. This will optimize the requirements for the phased passage of the certification procedure and serve as a stimulating element for attracting new producers of organic products. An equally important strategic problem is the organization of effective marketing channels for organic products. The relevance of food security and the availability of food are topical issues in Russia. In the agro-industrial multifaceted, issues related to low profitability of production, preservation of the genetic material of farm animals, and others have not been resolved. The main measures to increase the economic accessibility of food can be implemented through regional programs for sustainable development of country area One of the urgent problems of the world community is the development of organic farming and the formation of markets for organic products. At the same time, commodity differentiation of organic products and geographic segmentation are the main factors influencing the development of organic farming. The producers of organic products in Russia, as a rule, are small businesses. Development of organic farming is of particular importance for cross-border agro-oriented regions, since it contributes to the development of export activities and commodity diversification. For the Altai Territory, the development of organic farming makes it possible to effectively develop new areas of gastronomic and rural tourism.

ЗОВНІШНЬОЕКОНОМІЧНА БЕЗПЕКА АГРАРНОГО СЕКТОРУ В КОНТЕКСТІ ЗОВНІШНЬОТОРГОВЕЛЬНОЇ ДИФЕРЕНЦІАЦІЇ

The article highlights the need to develop effective mechanisms for guaranteeing the foreign economic security of agricultural enterprises due to the increase in their foreign trade activity. The share of agricultural exports in the structure of national exports is key, which confirms the feasibility of relevant research. In this case, the question of the quality of export activity becomes relevant not only due to the increase in value volumes but also given its content. Therefore, the problem of the high share of primary agricultural products in the export of agricultural products is problematic, which precedes the problem of forming the characteristics of the domestic agricultural sector as a resource with a low level of added value. The article examines the relationship between the state of foreign economic security of the agricultural sector with the commodity and geographical differentiation of foreign trade. The problem of insufficient commodity differentiation is problematic because to a greater extent domestic agricultural exports are represented by goods of plant origin. Moreover, the basis of exports of crop products are cereals and oilseeds. This state of affairs forms a position of high dependence on trends in foreign markets and fluctuations in demand for these types of crops, which precedes the existence of problems of foreign economic security of the agricultural sector in general and enterprises in particular. Instead, the situation of geographical differentiation has positive characteristics due to the balancing of priorities in trade relations. Despite the European integration path of Ukraine's development, the degree of dependence on fluctuations in demand in EU markets is within the norm. Positive is the destruction of the established approach to the priority of cooperation with the Russian Federation and the acquisition of new markets for agricultural products. The effectiveness of this kind of change in geographical differentiation is confirmed by the positive balance of export-import activity. However, it is worth noting the negative trends in terms of imports. For example, with minimal exports to the United States, we have huge volumes of imports. A mechanism of a certain kind of "structural isolation" should be formed, which would determine the limits of expediency of interstate cooperation in the sense of trade in agricultural products, based on efficiency indicators.

Product differentiation and dynamics of cost pass-through in the German fish market: An error-correction-distance measure approach

Product differentiation is an important tool to target different consumer groups and to generate price premiums for different commodities. Product differentiation affects the level of competition, consumer costs and can alter the dynamics of cost pass-through. In this study, we focus on the natural differences in nutritional levels (omega-3, fats, proteins, vitamins) across fish species to differentiate fish products. We model and test the importance of nutritional differences as an explanatory factor in the dynamics of cost pass-through for different fish species in the German retail frozen fillet market. We combine a large consumer panel of fish purchases at the retail level with trade data on fish import prices covering the period January 2006 to December 2010. A distance measure is used to aggregate over product nutrients. Combining the distance measure within an error-correction equation shows that cost pass-through is (statistically) negatively correlated with the degree of product differentiation. Commodity differentiation matters in the dynamics of convergence to equilibrium.

Berry Supply Chain Management: An Empirical Approach

The aim of this study is to explore the strategy and supply chain management characteristics of berry-related companies to face the bargaining power unbalance that fosters the European fresh food supply chain; branding-differentiation strategies are particularly explored as mechanisms to create sustainable value for all players along the chain. To this end, a case study is deeply analyzed to find out the different supply chain management mechanisms used by an international berry marketer in order to strengthen the adoption of a commodity differentiation strategy through the creation and positioning of a high-value brand. Data were obtained through 15 semi-structured interviews. Findings suggest that strategic moves towards differentiation and positioning might be bolstered by the development and management of stable relationships with the different members involved in the supply chain. Additionally, supply chain risk-control mechanisms, rather than having a central role in the management of the various members of the chain, turned out to be support mechanisms that work together with corporate identity alignment and inter-organizational trust in order to ensure cooperation toward differentiation and positioning in the market.

Core equivalence with differentiated commodities

This paper presents improved core equivalence results for atomless economies with differentiated commodities in the framework of Ostroy and Zame (1994). Commodity bundles are elements of the space M(K) of signed Borel measures on a compact space K of commodity characteristics. Ostroy and Zame provide two sufficient conditions for core equivalence: It is sufficient that markets are “physically thick”, so that there are many suppliers of every commodity, or that markets are “economically thick”, so that consumers are sufficiently willing to substitute commodities with a similar composition for each other. The sufficient conditions in Ostroy and Zame (1994) all imply that there are “many more agents than commodities”, an idea of Aumann that was formalized and discussed in Tourky and Yannelis (2001) and Greinecker and Podczeck (2016). We generalize the framework in Ostroy and Zame (1994) and weaken their sufficient conditions to not imply the presence of “many more agents than commodities”. In particular, we drop the requirement that K is metrizable from the basic model, the requirement of an uniform bound on endowments from the condition of “physically thick markets”, and the requirement that preferences are weak∗-continuous from the condition of “economically thick markets”. Core equivalence still holds, showing that “many more agents than commodities” are not needed for core equivalence in models of commodity differentiation.

The structure of competitive equilibria in an assignment market

We study the structure of the set of competitive equilibria in a generalized assignment market. When all indivisible goods are homogeneous, it holds, called non-simultaneous multiplicity, that if there are multiple competitive prices, the equilibrium quantity supplied is unique; equivalently, if there are multiple equilibrium quantities, the competitive price is unique. We show that even if we allow commodity differentiation, the non-simultaneous multiplicity holds separately for each type of an indivisible good. Based on this result, we can evaluate the sizes of the sets of competitive prices and quantities for each good. As an application, we give a sufficient condition for the set of competitive prices to shrink to a unique price when markets are large and dense. We also argue that it would be difficult to extend the non-simultaneous multiplicity result to a market model where each buyer may demand more than one unit of an indivisible good.

Symbolic Value Transfer for Commodity Differentiation: New Brand Creation Versus Brand Extensions in the Context of Agricultural Products

This article aims at exploring whether and how brand extensions are a suitable strategy for branding commodities. The extant literature has focused on line and brand extensions for differentiated products, without providing rewarding results on the use of brand extensions for commodities. The results of two empirical studies, conducted in the context of agricultural products, show that the creation of new brands is preferable in case of scarce category fit between the parent brand and the commodity product, and that brand extensions are appropriate to differentiate commodities only if the parent brand is originally from a commodity, distant product category.

The equilibrium set of economies with a continuous consumption space

Abstract We study global properties of the equilibrium set of economies with a continuous consumption space. This framework is important in intertemporal allocation problems (continuous time), financial markets with uncertainty (continuous states of nature) and models of commodity differentiation. We show that the equilibrium set is contractible which implies that (i) there is a continuous economic policy linking any two equilibrium states, and (ii) any two such economic policies can be continuously deformed one into the other. We also give three equivalent formulations of the problem of global uniqueness of equilibria in terms of the projection map from the equilibrium set to the space of parameters. We finally study the local and global effects that the existence of critical economies has on the equilibrium set.

Tinjuan Historis : Konformitas Pasar versus Konsep Global Pembangunan Dunia

The world has experienced many developments of each economic model. The interesting thing is that, the worldwide economic development tend to be a linear development. If we see on the past, e.g. several centuries ago, the economy in the world is all on the pure form of trading. Every area, with its own communities, has different natural resources and their own made-craft. Because of the difference in the community and natural resources each area has, it results on the commodity differentiation. It can not be denied that as the time goes by, human’s needs will also develop not only in the sense of housing, clothes, and food needs but it is beyond those needs. The needs for other things and the eminence of each area of its natural resources are the factors which are finally emerging the need of exchange by inter-individuals on each area and to other areas. This is what we called as trading, in advance. By the existence of this kind of trading and the certainty of place and system, these result on the existence of what we call now as market. In the modernity context, what is explained as market here is a traditional market. The question is the existence of traditional market still relevant in the daily economic model, in which nowadays we are not in the peak time of traditional market anymore? Trading model which has capital source and orientation is being the focus of today's economy.

A Model of Commodity Differentiation with Indivisibilities and Production

This paper presents an existence theorem in a general equilibrium model of a production economy with commodity differentiation and indivisibilities. The model is motivated by the existence of markets with indivisible commodities, such as the markets for automobiles and computers. As is standard in the literature, the space of commodity characteristics is described by a compact metric space and a commodity vector is described by an integer-valued Borel measure on the space of commodity characteristics. An atomless measure space of producers and consumers is assumed to overcome the problem of non-convexity of the production and consumption sets induced by indivisibilities.

The effects of the GSTP on trade flow: mission accomplished?

This paper investigates whether the Global System of Trade Preferences among developing countries (GSTP) achieves its intent to increase the trade of capital goods between member countries. For this purpose, trade data disaggregated by the degree of commodity differentiation and various GSTP regional dummies are employed in a gravity equation. Estimation results say that the value of trade between GSTP member countries has increased significantly since the formation of the GSTP in 1989, and the trade of differentiated commodities has increased remarkably compared with other commodities. Therefore, it can be asserted that the mission of the GSTP has been accomplished successfully.

Manipulation-proof equilibrium in atomless economies with commodity differentiation

In this paper, we introduce a perfect competition test which checks the incentives of arbitrarily small coalitions to behave strategically in endowments and preferences. We apply this coalitional incentive compatibility test to atomless economies with a continuum of differentiated commodities. We show that, under thickness conditions, economies with a finite number of types and economies whose set of agents' preferences is compact, pass this perfect competition test. Limiting results for replica economies are also presented.

Edgeworth's conjecture with infinitely many commodities: commodity differentiation

Convergence of the cores of finite economies to the set of Walrasian allocations as the number of agents grows has long been taken as one of the basic tests of perfect competition. The present paper examines this test in the most natural model of commodity differentiation: the commodity space is the space of nonnegative measures, endowed with the topology of weak convergence. In Anderson and Zame [12], we gave counterexamples to core convergence in L 1, a space in which core convergence holds for replica economies and core equivalence holds for continuum economies; in addition, we gave a core convergence theorem under the assumption that traders' utility functions exhibit uniformly vanishing marginal utility at infinity. In this paper, we provide two core convergence results for the commodity differentiation model. A key technical virtue of this space is that relatively large sets (in particular, closed norm-bounded sets) are compact. This permits us to invoke a version of the Shapley-Folkman Theorem for compact subsets of an infinite-dimensional space. We show that, for sufficiently large economies in which endowments come from a norm bounded set, preferences satisfy an equidesirability condition, and either (i) preferences exhibit uniformly bounded marginal rates of substitution or (ii) endowments come from an order-bounded set, core allocations can be approximately decentralized by prices.

The efficiency of monopolistically competitive equilibria in large economies: Commodity differentiation with gross substitutes

A general model of commodity differentiation is developed using two different approaches to the theory of demand. It is shown that a local version of Bertrand's argument holds under reasonable conditions. If all commodities are sustitutes and sunk costs are small, there is never too little commodity differentiation relative to the optimum. Under the same conditions, monopolistically competitive equilibria are approximately perfectly competitive if the optimal collection of commodities is sufficiently rich.

A Competitive Model of Commodity Differentiation

A Competitive Model of Commodity Differentiation

Existence of equilibria with infinitely many consumers and infinitely many commodities: A theorem based on models of commodity differentiation

This paper presents a general result on the existence of competitive equilibria in exchange economies in which consumers and commodities are both infinite in number. The result shows that — in this framework at least — the added assumptions necessary to handle models with infinitely many agents are remarkably similar to the additional restrictions needed when only finitely many commodities are available for trade. It is shown that the results apply, in a straightforward manner, to two of the common models of consumer choice when commodity differentiation is an important consideration.