Three Essays on The Problem of Hold-up in Broiler Industry

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Title: Three Essays on The Problem of Hold-up in Broiler Industry
Author: Leegomonchai, Porametr
Advisors: Tomislav Vukina, Committee Chair
Armando Levy, Committee Member
Walter Thurman, Committee Member
David Flath, Committee Member
Abstract: This study examines the existence of the hold-up problem in the broiler industry. Under production contracts, broiler growers may be subject to market failures, and thus, may be held up by opportunistic broiler processors. We found no evidence that processors discriminate among growers by distributing inputs of varying quality in the sequences of repeated short-term contracts. We also found that market power does not affect the decision in the grower's relationship-specific investment which indicates that there is no manifestation of the hold-up problem from growers who rationally anticipate it. Hence, market failures are not significant. Furthermore, by using the interest group theory of regulation, we confirm that the broiler industry operates efficiently. Further regulation to protect growers is not needed in the broiler industry.
Date: 2003-04-21
Degree: PhD
Discipline: Economics

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