Market-level effects of competition: prices, quality, and mechanisms

本研究以实验的方法来检验一个基本的经济理论-市场竞争对价格、产品质量、现有企业退出决策、消费者福利的影响，以及这些变化如何影响消费者对质量的感知、购买习惯和行为。 实验应用于农业投入品市场。 本研究项目将利用一家大型注重质量的农业投入品连锁店进入一国农业投入品市场的机会，研究这种注重质量的连锁店进入市场是否能改善这一市场的结果，特别是价格、质量和肥料的使用。 研究人员还将研究农民如何改变他们对质量和购买习惯的看法，因为他们了解了新的市场进入者的不同质量和价格，以及现有形式对这些市场变化的反应。 本研究项目的结果不仅将提供竞争压力对产品质量、价格和消费者福利的影响的实证检验，还将显示一种提高农业生产率的机制，特别是在低收入国家。 这将提高农民的生产力和收入，从而减少贫困。 该研究项目将使用现场实验室来衡量进入市场对质量，价格和偏好变化的更广泛影响。PI假设，这些影响将通过新公司增加对现有零售商的竞争压力和/或改变消费者的信念来实现。 现代种子和肥料有可能提高农业产量，但在低收入社区，市场上的低质量投入很普遍。 这会降低农民使用现代投入的倾向，从而降低农业生产力和经济增长。 本研究计划提出一个双管齐下的研究设计，以研究新的市场进入者的影响。首先，新进入者愿意随机选择新店将在一组预先确定的地点开业。这将使PI能够衡量竞争如何影响价格，质量和公司进入/退出。第二，对居住在研究市场附近的农民进行的试验将衡量他们是否愿意为不同来源和质量水平的投入物付费。这些实验将揭示市场效应背后的机制。通过研究市场力量是否能够提高消费者可获得的产品质量，研究结果可能对该区域的经济增长和数百万农民的福利产生重大影响。 这项研究的结果将为政策提供信息，以增加现代农业投入的采用，从而提高生产力和收入，从而减少贫困。该奖项反映了NSF的法定使命，并通过使用基金会的知识价值和更广泛的影响审查标准进行评估，被认为值得支持。

This research project uses experimental methods to test a fundamental economic theory---the effects of market competition on prices, product quality, exit decisions of existing firms, consumer welfare as well as how these changes affect consumer perception of quality, buying habits, and behavior. The experiments are applied to agricultural input markets. This research project will take advantage of the entry of a large quality conscious agro-input store chain into the agro-input market of a country to examine whether entry by this quality-conscious chain can improve outcomes in this market, especially price, quality, and usage of fertilizer. The researchers will also study how farmers change their views on quality and buying habits as they learn about the differential quality and prices of the new market entrant as well as the reaction of existing forms to these market changes. The results of this research project will not only offer an empirical test of the effects of competitive pressures on product quality, price, and consumer welfare, it also shows one mechanisms through which agricultural productivity can be increased, especially in low income countries. This will increase the productivity and incomes of farmers, thus decreasing poverty. This research project will use lab-in-the field experiments to measure the broader impacts of entry on the market with particular refence on quality, price and changes in preferences. The PIs hypothesize that the effects will take place through the new firms increasing competitive pressures on existing retailers and/or by shifting consumer beliefs. Modern seeds and fertilizers have the potential to boost agricultural yields, but there is a high prevalence of low-quality inputs on the market in low income communities. This can reduce farmers’ propensity to use modern inputs which in turn lowers agricultural productivity and economic growth. This research project proposes a two-pronged research design to study the effects of new market entrant. First, the new entrant is willing to randomize where the new stores will open across a set of pre-identified locations. This will allow the PIs to measure how competition affects prices, quality, and firm entry/exit. Second, experiments with farmers who live near study markets will measure their willingness to pay for inputs of differing provenance and quality levels. These experiments will shed light on the mechanisms behind market-level effects. By studying whether market forces can increase the product quality available to consumers, the findings could have large implications for economic growth in the region and for the welfare of millions of farmers. The results of this research will inform policies to increase the adoption of modern agricultural inputs, hence improve productivity and incomes, leading to poverty reduction.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.