Tenders for European cereal export refunds: A structural approach

A large part of the EU's export refunds are awarded through tender procedures. We apply auction theory to model the traders' behaviour for weekly tenders of soft wheat intervention stocks. Specification and estimation of the optimal bidding strategy are developed under two opposing assumpt...

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Bibliographic Details
Published in:European review of agricultural economics 1996, Vol.23 (1), p.5-26
Main Authors: BOURGEON, JEAN-MARC, ROUX, YVES LE
Format: Article
Language:English
Subjects:
auction modelling
cereal
econometrics
European Union
export refund
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Summary:A large part of the EU's export refunds are awarded through tender procedures. We apply auction theory to model the traders' behaviour for weekly tenders of soft wheat intervention stocks. Specification and estimation of the optimal bidding strategy are developed under two opposing assumptions about the traders' valuation of grain, each corresponding to a particular functioning of international soft wheat and related markets. This structural approach allows us to conclude that the traders' market power is relatively weak.
ISSN:0165-1587
1464-3618
DOI:10.1093/erae/23.1.5