Residual Supply Analysis of the United States Corn Export Market

Six models of imperfect competition test the interaction between the United States and Argentina in the Japanese corn import market. The models evaluated were the Bertrand (1883), Cournot (1897), and Stackelberg (1952) with price and quantity leadership by the United States and Argentina. Models were compared using a non-nested likelihood ratio test. Results of the analysis did not show a statistically significant preference of one model over another. The dominance of the United States in the Japanese corn import market is the likely cause for the results. The methodology used in this analysis could be applied to alternate commodities such as soybeans or wheat.