This interdisciplinary day will close the CIREQ-CIRANO-RRECQ Workshops on Environmental and Natural Resource Economics, organized by Geir B. Asheim (Oslo University), Hassan Benchekroun (McGill University), Sophie Bernard (Polytechnique Montréal, CIRANO), Etienne Billette de Villemeur (Université de Lille, UQAM), Robert Cairns (McGill University), Justin Leroux (HEC Montréal, CIRANO), and Charles Séguin (UQAM, CIRANO).
The day will welcome Florentin Ametonou, PhD student at UQAM, Bruno Larue (Laval University), Aurélie Harou (McGill University).
- Florentin Ametonou, PhD student at UQAM
Abstract to be published
- Bruno Larue (Laval University)
Near zero trade flows and gravity with endogenous market structures
Abstract
Trade in agricultural products is often modeled as an oligopoly because exports originate from a small number of countries, with a handful of traders, private or state-owned. Trade statistics at the commodity level typically show many zeros and near-zero trade flows and countries importing from a single source. We develop a simple theory and an empirical framework that posit that there is an effective market size threshold below which imports are zero and a threshold over which all export traders enter with certainty and in between there are markets that can be entered profitably by a single trader, but not by two or more, which rationalizes randomized entry and mixed or correlated strategy equilibria. Canada is a much larger producer and exporter of maple syrup yet there are more countries buying only from the USA. We show that this is consistent with equilibria in mixed strategies with a Canadian cost advantage. Our estimation strategy estimates market structure probabilities in a first step and market structure-specific gravity equations in a second step.
- Aurélie Harou (McGill University).
Abstract to be published
This event will be in English.
This workshop is supported by the Centre interuniversitaire de recherche en analyse des organisations (CIRANO), the Centre interuniversitaire de recherche en économie quantitative (CIREQ), the Réseau de recherche en économie circulaire du Québec (RRECQ), and the Fonds de recherche du Québec (FRQ).
