How Compeve s he World Whea Marke? Coln A. Carer, Donald MacLaren, and Alper Ylmaz * JEL classfcaon: F4; L0; Q7 Absrac Japan s one of he larges mporers of whea, wh mpors orgnang from hree conres, Asrala, Canada, and he Uned Saes. Asrala, Canada and Japan all se a governmen sngle-desk agency o conrol whea rade. Many prevos sdes on compeon n he world gran rade have arged he marke s mperfecly compeve, and hey ofen pon o he Japanese marke. We sdy he Japanese whea mpor marke for hs reason, b fnd no compellng evdence of mperfec compeon on he exporers sde. I. INTRODUCTION The global gran rade has always been of neres o economss becase gran represens he sngle mos mporan componen of world food consmpon. I s one of he world s key saple prodcs, wh abo 2 percen of prodcon raded on world markes each year. The majory of prevos sdes on compeon n he world gran rade have arged he marke s mperfecly compeve. For some markes (whea, rce) he exporers have been fond o hold marke power (Kolsad and Brrs [986], Karp and Perloff [989]), whle ohers sgges he mporers have he power o nflence prce (Love and Mrnnngyas [992], Sampson and Snape [980]). In some ways, hese resls are srprsng. How s ha prce can be se dfferen from margnal cos for a commody prodced arond he world wh ease of enry nless here are ncreasng rerns o scale? Ths paper revss he qeson of wheher here s any evdence of mperfec compeon n he gran rade, wh a focs on whea n Japan. We allow for varos possble forms of mperfec compeon. Ths qeson s crrenly mporan for a leas wo reasons. Frsly, he new rade heory sggess here are possble sraegc reasons for governmen nervenon n nernaonal markes based on mperfec compeon (Corden [99]). Secondly, he marke mpacs of sae radng agences n grans are a prory em n he nex rond of World Trade Organzaon (WTO) negoaons, and perhaps he bgges sse facng agrclral rade may be he compeve mpacs of sae radng enerprses n grans sch as he Asralan Whea Board (AWB), he Canadan Whea Board (CWB), and he Japanese Food Agency (JFA) (Dx and Joslng [997]). Asrala, Canada and Japan all se a governmen sngle-desk agency o conrol whea rade. Frhermore, Japan has conssenly mpored arond 6.5 percen n vale of he oal whea raded n nernaonal markes, procred oally by he Uned Saes, Canada, and Asrala. In mos prevos sdes on he gran rade, he Corno non-cooperave olgopoly model wh homogeneos prodcs has ypcally been employed. Presmably, he qany-seng assmpon s more convenen han he alernave of prce seng becase mperfec compeon n prces mples dfferenaed prodcs, f he Berrand paradox s o be avoded. Assmng for he momen ha here exs olgopolsc nernaonal markes for some commodes, s dffcl o know, a pror, wheher hese markes are characerzed by frms adopng a prceor a qany-seng sraegy. Theorecally, here are reasons o expec eher ype of behavor, dependng on marke and cos condons. For example, n some markes, sch as he Japanese marke, commody mpors may no necessarly be procred from he lowes cos sppler. Wolak and Kolsad [99] examned Japanese mpors of coal and arged ha Japan mpors from a varey of conres n order o dversfy rsk, and does no neces- * Coln A. Carer s Professor of Agrclral and Resorce Economcs and a member of he Gannn Fondaon, Unversy of Calforna, Davs. Donald MacLaren s an Assocae Professor of Economcs, Unversy of Melborne. Alper Ylmaz s a Ph.D. canddae n Agrclral and Resorce Economcs, Unversy of Calforna, Davs. Senor ahorshp s nassgned.
sarly mnmze he cos of mpors. If he Japanese manage mpors and pre-deermne qanes o be mpored from each sorce, hen exporng frms wold fnd opmal o se prces raher han qanes (.e., prce s he sraegc varable). Alernavely, he se of prce raher han qany as he sraegc varable mgh be deermned by he nare of he commody n qeson raher han he desnaon marke. Ceers parbs, mgh be expeced ha here wold be prce compeon for commodes ha can be sored a relavely low cos (e.g., rce, whea and coal) becase here s no reason ha crren prodcon need be sold drng he crren perod. In hs paper we begn wh he vew ha he whea marke may or may no be compeve. If s mperfecly compeve, we beleve may be characerzed by eher prce or qany compeon. We presen a se of alernave heorecal models of he Japanese marke for whea mpors n whch accon s aken of varos forms of sraegc neracon among Asralan, Canadan and Uned Saes exporers. We es for he ype of sraegc neracon ha s mos conssen wh he daa. Or analyss s condced n wo seps. We frs calclae he elascy of he resdal demand for Japanese whea mpors for each of hree exporers, o deermne wheher here s any evdence of markp over margnal cos. Ths allows s o narrow down he nmber of possble models. Then, on he bass of a sascal es developed by Vong [989], we esmae whch of he (remanng) compeng models bes fs he daa. II. ELASTICITY OF THE RESIDUAL DEMAND CURVE The degree of compeon n a marke s ofen expressed as he relave mark-p of prce, p, over margnal cos, MC,.e., as he Lerner Index ( p MC) p. In pracce, s sally nearly mpossble o oban daa a he frm level on margnal coss or even prces n order o calclae he ndex. In he presen conex, we wold need o oban prce and margnal cos daa for he wo sae radng enerprses (he AWB and he CWB) and for US frms whch expor o Japan. Hence, he drec measremen of marke power s no praccable. Followng Bresnahan [989], and Goldberg and Kneer [999], we make se of he relaonshp beween he Lerner Index and he elascy of he resdal nverse demand fncon faced by each exporng conry. A one exreme, hs elascy s zero when here s perfec compeon and here s no mark-p over margnal cos; a he oher, concdes wh he marke demand elascy of a monopols and he mark-p s ha of he monopols. In beween hese exreme cases, he resdal nverse demand elascy reflecs ha of an olgopoly. In he laer case, he perceved resdal nverse demand elascy wll depend pon he mporng conry s nverse demand elascy and he sraegc neracon beween exporng conres. Hence, he elascy of he resdal nverse demand fncon s a praccal way of measrng a conry s marke power n a parclar mpor marke. For example, f he exporng conry has no marke power, hen changes n s level of expors wll no aler s expor prce and s resdal nverse demand fncon wll be horzonal. Ths, f s ndcaed by he daa ha hs conry s prce s deermned by shfs n s compeors coss and no by s own qany expored, hen has no marke power. Alernavely, f here s a negave relaonshp beween qany expored and prce receved, hen here s marke power. However, he nqeness of he relaonshp beween he Lerner Index and he elascy of he resdal nverse demand fncon depends pon wheher he acal and perceved fncons concde. Baker and Bresnahan [988] show ha here s concdence for he Sackelberg and domnan frm models. In boh models, he domnan frm akes accon of he followers spply and, herefore, correcly perceves s resdal nverse demand fncon. Ths here s a drec relaonshp beween he relave mark-p, he elascy and marke power. There s also a drec relaonshp when here s perfec compeon and when here s sbsanal prodc dfferenaon (Goldberg and Kneer [999, p. 39]). In oher forms of marke srcre, here s no a specfc relaonshp beween he relave mark-p and he resdal nverse demand elascy. Or approach o esmang he parameers of he resdal demand fncon follows Goldberg and Kneer [999]. Usng hs mehod, an nverse demand fncon for each exporng conry s defned as a fncon of he oal qany of own expors, prces of each compeng exporng conry, as well as a vecor of demand shfers n he desnaon marke. Usng s nverse demand fncon, each exporng conry smlaneosly solves s prof maxmzaon problem o generae an expresson for s prce defned as a fncon of s own expors, a vecor of cos shfers n each of he compeng exporng conres, and a vecor of demand shfers n he desnaon marke. The smlaneos solon of he maxmzaon problem enables he elmnaon of he prces of he compeng prodcs from each mplc prce expresson. Goldberg and Kneer are able o defne a redced form eqaon from whch marke power can be nferred who beng able o denfy separaely he parameers of he nverse resdal demand fncon and he frs-order Ths approach assmes ha each conry s a frm. For he Uned Saes, where here s more han one frm exporng o Japan, we nerpre he parameers as shareweghed ndsry averages for all frms. Ths enables s o ransform he frs-order condons so as o be esmaed wh marke level daa who sng mplasble aggregaon assmpons. 2
condons. The form of he eqaon for he Uned Saes s as follows: () c c a a ln p = α + η ln Q + β lnw + β lnw + γ ln Z + ε where p s he prce (n vale) of US whea expored o Japan n Yen, Q s he qany of US whea expored o Japan, W s he vecor of cos shfng varables for expor compeor ( = a, c ), Z s a vecor of demand shf varables n Japan, η s he elascy of he resdal nverse demand fncon, β s he coeffcen vecor for he cos shf varables for he man compeors, Canada and Asrala, and γ s he coeffcen vecor of demand shfers for he desnaon marke, Japan. The eqaons for Canada and Asrala are smlar. The sbscrp sands for me, and ε s he error erm. The cos shfers nclde measres of np prces as well as exchange raes. The demand shfers conss of real ncome n he desnaon marke. Gven he doble logarhmc fnconal form, s possble o separae he shf varables no wo componens, namely, her vales n domesc crrency and he exchange rae beween each conry s crrency and he Yen (see Goldberg and Kneer [999, p. 4]). Ths procedre allows he exchange raes o ac as cos shfers, whch dsplay consderable varaon over he sample perod. The expor volme of each exporng conry o Japan s an endogenos varable. The nsrmen proposed by Goldberg and Kneer [999, p. 4] s he exchange rae beween he exporng conry s crrency and he mporng conry s crrency. The daa sed n hs sdy cover 88 qarerly observaons over he 970-99 me perod. The US n vales and expor qanes are based on he monhly Deparmen of Commerce, Brea of he Censs daa. Canadan daa were obaned from Sascs Canada, Inernaonal Trade Dvson and from he Wnnpeg Commody Exchange. The Asralan daa came from he Asralan Brea of Sascs and Wool Inernaonal. Real GDP daa were obaned from he Inernaonal Fnancal Sascs (IFS) of he Inernaonal Moneary Fnd. The exchange raes were obaned from he USDA daabase o be fond a hp://sda.mannlb.cornell.ed/ mor_sar.hml. 2 2 The model was also esmaed sng varos oher specfcaons ha nclded labor cos ndces, prodcer prce ndces and wholesale prce ndces, n addon o he above varables. The parameers for hese varables were sascally nsgnfcan, and hey were dropped from he fnal specfcaon. The mehod of wo-sage leas sqares was sed o esmae eqaon (). The resdal nverse demand elascy for he Uned Saes s repored as he coeffcen of he rgh-hand sde varable, LOGUSQ (Table ). The absole vale of he coeffcen, whch s sgnfcanly dfferen from zero and wh he expeced sgn, approxmaes he mark-p over margnal cos. I mples a resdal demand elascy of.08 ( = / 0.93 ), n absole vale. Ths, he conjecre ha he US has a horzonal resdal nverse demand fncon s rejeced and wh, he conjecre of compeve behavor by ha exporng conry. The resls for Canadan whea expors o Japan are presened n Table 2. The dependen varable s he logprce of Canadan whea o Japan (n Yen). The se of cos and demand shfers nclde he same varables as for he US eqaon b replacng he varables for he Uned Saes wh hose from Canada. The se of nsrmens was seleced n a smlar way. The resls of hs esmaon mply ha here s no sgnfcan mark-p over margnal cos for Canadan whea, alhogh he coeffcen has he correc expeced sgn. All of he oher rgh-hand sde varables were sascally sgnfcan, excep for he Asralan exchange rae agans he Japanese Yen. In oher words, Japanese expendre on whea and he US exchange rae agans Japanese Yen, as well as he prodcon cos ndces for he Uned Saes and Asrala have explanaory power regardng he prce of Canadan whea expored o Japan. Ths resl s conssen wh Canada beng a prce aker becase changes n he Canadan expor prce do no vary wh expor volme b wh changes n he coss of compeors and shfs n Japanese mpor demand. The resls of he resdal demand elascy esmaon for Asralan whea are presened n Table 3. The se of cos and demand shfers s formed as before and he se of nsrmens s also smlar, excep ha he eqaon ncldes he frs lags of he log-prce and log-qany of he Asralan whea expors o Japan becase of seral correlaon n he orgnally specfed eqaon. The coeffcen of prmary neres, LOGAQ, has he correc sgn b s no sgnfcanly dfferen from zero. Ths can be nerpreed as no evdence of mark-p over margnal cos for Asralan whea expored o Japan. Japanese expendre on whea has he expeced sgn and s sgnfcanly dfferen from zero. The prodcon cos ndex for he Uned Saes s he oher sgnfcan explanaory varables. The US and Canadan exchange raes agans he Japanese Yen do no have any explanaory power. Hence, here s weak evdence ha Asrala s a prce aker n he Japanese marke. I was arged above ha he resdal demand elascy can be vewed as a measre of he degree of compeon and, nder ceran forms of mperfec compeon, can be relaed drecly o he Lerner Index. One of hese forms s prce leadershp. Or resls ndcae ha he 3
Uned Saes s possbly a prce leader n he Japanese marke for mpored whea whereas Asrala and Canada form a compeve frnge. Ths fndng allows s o elmnae he alernaves of Corno or Berrand compeon becase here s only one conry wh any evdence of marke power. B here s anoher possbly, namely, ha here s monopsony power, where Japan exers some marke power n he nernaonal whea markes (Love and Mrnnngyas [992]). Therefore, n he second sage of or analyss, we focs on hree alernave marke srcres, namely, compeve prcng, monopsony, and US prce leadershp wh a compeve frnge. III. LIKELIHOOD RATIO TESTS FOR MODEL SELECTION Now ha he nmber of relevan models has been narrowed down, he approach aken n hs secon s o derve and esmae a srcral economerc model assocaed wh each of hese hree marke srcres for he sx endogenos varables, whch are qanes and prces for he hree compeng exporng conres. Each marke srcre nvesgaed s nesed n a general lnear model hrogh he se of cross-eqaon resrcons. 3 III(). The Compeve Model Le he nverse demand fncon facng he h exporng conry be (2) p q p y = γ 0 δ + δ j j + γ, j =, c, a and j where p s he prce of conry s expors n he mporng conry s crrency, q s he qany expored by conry, y s he oal expendre on mpored whea by Japan. The spply fncons are defned as p = + q + PP, (3) θ0 θ θ2 where PP s a proxy for np prces n Japanese Yen n exporng conry, measred n erms of he opporny cos of growng alernave crops. Ths proxy s he prce of corn n he US case, ha of canola for Canada, and ha of wool for Asrala. For each conry, s assmed ha he exporng frm (whea boards for he Canadan and Asralan cases) maxmzes profs from expor sales only,.e., he domesc marke s gnored. Leng, Π = TR TC, he assocaed frs-order condon s p = + ( + ) q + PP. (4) θ0 δ θ θ2 3 See Carer and MacLaren [997] for more deal. Eqaons (2) and (4), for each of he exporng conres, form a sysem of sx smlaneos eqaons n sx endogenos varables, namely, prces and qanes. III(). The Monopsony Model Assme now ha he Japanese Food Agency acs as a monopsons and ha he exporng conres are prce akers. Le he Food Agency s margnal revene fncon for mpors from exporng conry be (5) MR = γ 2 δ q + δ p + γ y, 0 j j j =, c, a and j where he noaon s as before. The average olay fncon for whea from each of he exporng conres s he same as n Eqaon (3). Defnng he maxmzaon problem as, max Π = TR TO, he assocaed frs-order condon s (6) p = γ (2 δ + θ ) q + δ p + γ y, 0 j j j =, c, a and j. The average olay fncon (Eqaon (3)) and he frsorder condon (Eqaon (6)) now defne he model for esmaon. III(). The US Prce Leadershp Model Le he nverse demand fncon facng he h exporer be he same as n Eqaon (2). Wh n coss, c = θpp, frms maxmze Π = TR TC nder US prce leadershp, where TC = θpp q. The assocaed frs-order condon for he Uned Saes wll be (7) ( ) p = δ + δ δ + δ δ q θ PP, c c a a and ha for Canada and for Asrala wll be (8) p = θ PP, j = c, a. j j j Eqaons (2), (7) and (8) form a sysem of sx smlaneos eqaons n sx endogenos varables, namely, prces and qanes. III(v). Mehodology for Emprcal Analyss Snce he models derved above are non-nesed wh respec o each oher, he sascal esng of each ype of marke srcre reqres he se of a es for non-nesed models. Sch a es, o provde par-wse comparsons among dfferen non-nesed alernaves, has been consrced by Vong [989]. I shold be emphaszed ha he valdy of he es s no dependen pon one of he models n he par beng he correc model. The procedre begns wh he esmaon of he demand eqaons (spply eqaons for he monopsony case) and he frsorder condons jonly by he fll nformaon maxmm 4
lkelhood (FIML) mehod. The FIML parameer esmaes are no presened here, snce he magnde and he sgns of he parameers do no conrbe o or analyss. Neverheless, mos of he parameers have he expeced sgns even who any sgn resrcons on he models. The second sep n he procedre s o calclae he lkelhood rao, as ( L L ), for each of he hree pars f g of comparsons, ( M, M ), and hen o normalze hs dfference by f n 2 ' ' (9) n wˆ ( ˆ ˆ ˆ ˆ ˆ ˆ n = fσ f f gσg g ) = g 2 2 2 where L s s he log lkelhood, and ˆs and Σ ˆ s are he esmaed resdals and covarance marx for model M s, s = f, g. Under he nll hypohess ha each model fs he daa eqally well, he normalzed LR s asympocally dsrbed as a sandard normal varable. The decson rles for he es are: frs, f he absole vale of he normalzed LR sasc s less han he approprae crcal sandard normal vale, a some level of sgnfcance, hen s no possble o dscrmnae beween he wo models; and second, f he es sasc s less (greaer) han he approprae negave (posve) crcal vale, hen s conclded ha model M ( M ) s sgnfcanly beer. g The resls of hs approach are repored n Table 4. The LR sasc for he comparson beween he compeve model and he US prce leadershp model s 37.55, whch s sgnfcan a he percen level. Snce s posve, can be conclded ha he compeve model s sgnfcanly beer han he US prce leadershp model. The par-wse comparson beween he monopsony model and he US prce leadershp model provdes a sandardzed LR sasc of 27.60, whch s also sgnfcan a he percen level. Hence, he monopsony model s closer o he re daa generang process han he US prce leadershp model. The LR sasc for he comparson beween he compeve model and he monopsony model s.6. Snce hs vale s no sascally sgnfcan, means ha we canno dscrmnae beween he compeve and monopsony models. IV. CONCLUSION The compeve srcre of he nernaonal whea marke has been a mch nvesgaed sse. Ye despe he sbsanal amon of research, he defnve answer remans elsve. Some resls have sppored mperfec compeon amongs he exporng conres wh prceakng behavor amongs he mporng conres: oher resls have sppored monopsonsc behavor by ndvdal mporng conres and prce-akng behavor amongs exporng conres. Clearly, boh canno be correc. The sse remans: gven ha here are exporng f conres who capacy consrans on spply and relave freedom of enry o and ex from he marke, hen prces shold be close o margnal cos n he absence of marke power,.e., here shold be very lle relave mark-p. In hs paper, we have employed wo approaches. The frs approach s based on esmang he resdal nverse demand fncon facng each of he hree exporng conres (Asrala, Canada and he US) ha shp whea o Japan, whch s reaed as a segmen of he nernaonal whea marke. Ths approach perms an esmae of he relave mark-p. The second approach s based on a seres of non-nesed ess derved from he esmaon of a lnear model whn whch each marke srcre s nesed. The hree alernave marke srcres nvesgaed were compeve prcng, monopsony and prce leadershp by he US The resls generaed from he frs approach sppor he proposon ha he mpor marke for whea n Japan s mperfecly compeve on he expor sde. In parclar, he resls ndcae ha here s prce leadershp by he US and ha Asrala and Canada form a compeve, or prce-akng, frnge. The resls generaed n he second approach sgges ha prce leadershp by he US s nconssen wh he daa when alernave marke srcres are evalaed. Overall, or fndngs sgges ha we canno rle o he compeve model. REFERENCES BAKER, J. B. and BRESNAHAN, T. F., 988, Esmang he Resdal Demand Crve Facng a Sngle Frm, Inernaonal Jornal of Indsral Organzaon, 6, pp. 283 300. BRESNAHAN, T. F., 989, Emprcal Sdes of Indsres wh Marke Power, n SCHMALENSEE, R. and WIL- LIG, R. D. (eds.), Handbook of Indsral Organzaon, Volme II (Elsever, Amserdam). CARTER, C. A. and MACLAREN, D., 997, Prce or Qany Compeon? Olgopolsc Srcres n Inernaonal Commody Markes, Revew of Inernaonal Economcs, 5, pp. 373 385. CORDEN, W. M., 99, Sraegc Trade Polcy, n GREENAWAY, D., BLEANEY, M. and STEWART, I. (eds.), Companon o Conemporary Economc Thogh (Roledge, London). DIXIT, P. M. and JOSLING, T. E., 997, Sae Tradng n Agrclre: An Analycal Framework, Workng Paper No. 97-4, Inernaonal Agrclral Trade Research Consorm. GOLDBERG, P. K. and KNETTER, M. M., 999, Measrng he Inensy of Compeon n Expor Markes, Jornal of Inernaonal Economcs, 47, pp. 27 60. KARP, L. S. and PERLOFF, J. M., 989, Dynamc Olgopoly n he Rce Expor Marke, Revew of Economcs and Sascs, 7, pp. 642 670. 5
KOLSTAD, C. D. and BURRIS, A. E., 986, Imperfecly Compeve Eqlbra n Inernaonal Commody Markes, Amercan Jornal of Agrclral Economcs, 68, pp. 27 36. LOVE, A. H. and MURNININGTYAS, E., 992, Measrng he Degree of Marke Power Exered by Governmen Trade Agences, Amercan Jornal of Agrclral Economcs, 74, pp. 546 555. SAMPSON, G. P. and SNAPE, R. H., 980, Effecs of he EEC s Varable Impor Leves, Jornal of Polcal Economy, 88, pp. 026 040. VUONG, Q. H., 989, Lkelhood Rao Tess for Model Selecon and Non-nesed Hypoheses, Economerca, 57, pp. 307 333. WOLAK, F. A. and KOLSTAD, C. D., 99, A Model of Homogeneos Inp Demand nder Prce Uncerany, Amercan Economc Revew, 8, pp. 54 538. TABLE Resdal Demand Elascy Calclaon for he US Whea Dependen Var. : LOGUSPJ Mehod : Two-Sage Leas Sqares Nmber of Obs. : 86 Insrmen Ls : LOGJEJ, LOGNXAJ, LOGNXCJ, LOGAPP, LOGCPP, LOGNXJ, LOGUSPP Varable Coeffcen -sasc C.55 3.08 LOGUSQ -0.93-3.03 LOGJEJ.04 6.53 LOGNXAJ -0.20 -.34 LOGNXCJ 0.23 0.90 LOGAPP -0.00-0.02 LOGCPP 0.07 0.7 R 2 = 0.88, Adj. R 2 = 0.87, F-sa. = 0.28, DW sa. =.97 TABLE 2 Resdal Demand Elascy Calclaon for he Canadan Whea Dependen Var. : LOGCPJ Mehod : Two-Sage Leas Sqares Nmber of Obs. : 88 Insrmen Ls : LOGJEJ, LOGNXAJ, LOGNXJ, LOGAPP, LOGCPP, LOGNXCJ, LOGCPP Varable Coeffcen -sasc C 5.87.28 LOGCQ -0.49 -.29 LOGJEJ 0.49 3.6 LOGNXAJ -0.02-0.2 LOGNXJ 0.47 2.0 LOGAPP 0.2 2.6 LOGUSPP 0.43 3.29 R 2 = 0.85, Adj. R 2 = 0.84, F-sa. = 80.32, DW sa. =.90 6
TABLE 3 Resdal Demand Elascy Calclaon for he Asralan Whea Dependen Var. : LOGAPJ Mehod : Two-Sage Leas Sqares Nmber of Obs. : 85 (afer adjsng endpons) Insrmen Ls : LOGJEJ, LOGNXCJ, LOGNXJ, LOGCPP, LOGUSPP,LOGNXAJ, LOGAPP, LOGAPJ(-), LOGAQ(-) Varable Coeffcen -sasc C 3.83 2.75 LOGAQ -0.08-0.87 LOGJEJ 0.30 3.9 LOGNXCJ -0.22-0.62 LOGNXJ 0.2 0.30 LOGCPP 0.0 0.58 LOGUSPP 0.43 2.45 AR() 0.33 2.88 R 2 = 0.83, Adj. R 2 = 0.82, F-sa. = 54.3, DW sa. = 2.6 TABLE 4 Adjsed LR Sascs for Model Selecon M M 2 M 3 M.6 37.55 + M 2 -.6 27.60 + M 3-37.55 + -27.60 + Noes: M : Compeve model, M 2 : Monopsony model; M 3 : US prce leadershp model + Sgnfcan a he percen level n boh a one-sded and a wo-sded es. 7