Producer heterogeneity and voting power in mandatory US agricultural marketing organisations
Abstract
We consider how cost heterogeneity and market power affect voting power in producer referenda for mandatory agricultural marketing organisations with generic promotion programmes in the United States. We measure voting power using the Banzhaf Power Index and propose a new version of this index based on the profit-maximising theory of the firm that provides an improved estimate of voting power. Examining several types of demand shifts and voting rules, we find that both Banzhaf Power and our new measure vary considerably depending on the market structure and level of cost heterogeneity.
Many UC-authored scholarly publications are freely available on this site because of the UC's open access policies. Let us know how this access is important for you.