Oligopsony in the tire industry: A Study of its impacts on the natural rubber industry in Thailand

This supports the claim that typical agricultural policies designed to raise natural rubber supply elasticity, such as price stabilization and subsidies, could be adopted to counter oligopsony market power possessed by its downstream industries. Policies to raise supply elasticity such as access to information, income equalization funds and risk management are also supported. Policy implementations to address oligopoly power in tire market support attempts to increase competition in the global tire market from newly developing economies but further studies are called for in this regard. Originality/Value: Oligopsony market power theory based on an industry/firm level is applied to a global industry/country level. Hence, in addition to identifying economic inefficiency, this approach is capable of identifying welfare shifting from less developed countries producing commodity inputs to industrialised countries using the inputs. Furthermore, the approach is innovative as it estimates a market power index derived from a Cournot conjectural variation approach with four different variations. The multiple variation approach provides stronger support for the tested outcomes.