Buyer Conduct and Supply Shocks: Evidence from Uruguayan Meatpacking Firms

Title: Buyer Conduct and Supply Shocks: Evidence from Uruguayan Meatpacking Firms Speaker: José Manuel Paz y Miño (FEN U.Chile) Abstract: We investigate the relation between supply shocks and conduct when firms have oligopsony power. We explore if, following a supply shock, buyers increase or decrease their conduct. To do this, we estimate a structural model of the Uruguayan meatpacking industry, an export-oriented industry subject to frequent price-fixing investigations. Our results show that under supply shocks that reduce input prices, buyers increased their conduct. When we decompose the effect of this type of shock, we find that changes in conduct partially offset any potential welfare-enhancing effects. In our preferred specification, total surplus would have in