Table 3. Cost Pass Through Rate Equations For Two Processors and Two Retailers:
|
Cost Pass Through Rates |
Vertical Nash |
Value if, Retail |
Vertical |
Value if, Retail |
Vertical Coordination |
Value if, Retail |
|
Effect of Farm Price Change dp |
(3 a 1 - 2 a 2 )b 2 |
1 3 |
(4 a 1 - 3 a 2)b 2 |
1 4 |
b 2 (2a 1 - a 2) |
1 2 |
|
Effect of Farm Price Change dp |
(3 b 2 - 2 b,)a, |
1 3 |
(4 b 2 - 3 b1 )a 1 |
1 4 |
a 1(2 b 2 - b1) |
1 2 |
|
Effect of Firm 1 Specific Cost dp dm1 |
3 a 1 b 2 |
1 3 |
4 a 1 b 2 |
1 4 |
2 a 1 b 2 |
1 2 |
|
9 a 1 b 2 - 4 a 2 b1 |
16 a 1 b 2 - 9 a 2 b1 |
4 a 1 b 2 - a 2 b1 | ||||
|
Effect of Firm 1 Specific Cost dp dm1 |
— 2 a 1 b |
0 |
- 3 a 1 b1 |
0 |
- a 1 b1 |
0 |
|
9 a 1 b 2 - 4 a 2 b1 |
16 a 1 b 2 - 9 a 2 b1 |
4 a 1 b 2 - a 2 b1 | ||||
|
Effect of Firm 2 Specific Cost dp dm 2 |
— 2 a 2 b 2 |
0 |
- 3 a 2 b 2 |
0 |
- a 2 b 2 |
0 |
|
9 a 1 b 2 - 4 a 2 b1 |
16 a 1 b 2 - 9 a 2 b1 |
4 a 1 b 2 - a 2 b1 | ||||
|
Effect of Firm 2 Specific Cost dp dm 2 |
3 a 1 b 2 |
1 3 |
4 a 1 b 2 |
1 4 |
2 a 1 b 2 |
1 2 |
|
9 a 1 b 2 - 4 a 2 b1 |
16 a 1 b 2 - 9 a 2 b1 |
4 a 1 b 2 - a 2 b1 |
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