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- Title
Fair Trade.
- Authors
Richardson, Martin; Stähler, Frank
- Abstract
This paper analyses a setting in which a vertically integrated fair-trade firm competes against vertically disintegrated, profit-maximising oligopolists. Consumers of the fair-trade product derive a 'warm glow' that depends on the wage paid to fair-trade producers; the firm returns all surplus to its farmers. Trade integration will unambiguously increase the size of the fair-trade firm, but the relative size compared to oligopolists may shrink. Furthermore, we show that the 'warm glow' effect may support a marginal expansion of the volume of fair trade, but for rather perverse reasons.
- Subjects
UNFAIR competition; FARMERS; BUSINESS enterprises; AGRICULTURAL scientists; OLIGOPOLIES
- Publication
Economic Record, 2014, Vol 90, Issue 291, p447
- ISSN
0013-0249
- Publication type
Article
- DOI
10.1111/1475-4932.12136