CONSUMER PERCEPTION ON ORGANIC MERGERS AND TECHNOLOGY ADOPTION

Ae Rin Jung

This dissertation consists of three studies on consumer perception on organic mergers and technology adoption. The first paper examines the competition between organic and non-organic firms, their incentives to undertake a horizontal merger, and the effect of mergers on firms’ market shares. We also consider an alternative setting where one firm can acquire its rival. Our results show that both organic and non-organic firms have incentives to merge under large conditions. When demand and cost differentials are significant, we identify settings under which a firm purchases its rival, to subsequently shut it down, and yet increase its profits. We then find the merger can be welfare improving, which is more likely when goods are highly differentiated and their production costs are relatively symmetric. The second paper examines consumers’ preferences for organic foods and analyzes the effect of the merger information on their perceptions and willingness to pay for organic foods with regard to the business size, ownership, and the location of the business. Our results indicate that the merger information negatively affects the willingness to pay for organic while it positively affects that for vitamin. Using factor analysis, we find that the effect of the merger information depends on consumers’ attitudes, preferences, and perceptions. Stronger preferences for organic products attenuate the negative impact of the merger information on the individual’s willingness to pay for organic. The third paper examines the choice of optimal harvesting technology in the three major blueberry producing regions in the United States. We first compute the net present value (NPV) of the technologies, to assess outcomes under risk neutrality. Then, we apply stochastic dominance to account for risk. Modified OTR is the most profitable method in the Northwest and Southeast while in the Eastern OTR is. The Northwest region has a relatively shorter payback period for all technologies. Although the results of stochastic dominance indicate that modified OTR harvester is considered to be the most riskless methods in all regions, growers’ risk aversion level and the characteristics of farm operations may play an important role in the determination of harvest technologies.

CONSUMER PERCEPTION ON ORGANIC MERGERS AND TECHNOLOGY ADOPTION

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