Exerting Market Power: Competition Among Agricultural Traders in Kenya

Research Note
Published on 1 July 2020

Abstract

This research note describes experimental evidence from Kenya on intermediary market structure. We find that traders act consistently with joint profit maximization. Exogenously-induced firm entry has negligible effects on prices, and low take-up of subsidized entry offers implies large fixed costs. We estimate that traders capture 81% of total surplus.

Authors

Lauren Falcao Bergquist

University of Michigan

Michael Dinerstein

University of Chicago