Experimental economic procedures were used to measure the effects of changes in marbling score and Warner-Bratzler shear force (WBSF) value on consumer purchasing behavior and willingness to pay for beef strip loin steaks (n = 541). Consumers were more likely to bid on a steak during the experimental auction if the steak had a high marbling score or low WBSF value. Averaging across all consumers in the study (n = 489), the predicted odds that consumers would submit a nonzero bid were favorable for steaks with a marbling score greater than Modest(50) or a WBSF value less than 3.9 kg. Bid prices for steaks were analyzed with respect to changes in steak marbling score, WBSF value, quality grade marketing category classification (Select, Low Choice, Premium Choice, and Prime), and WBSF marketing category classification (very tender, 5.40 kg). The percentage of bids that were zero was highest (P < 0.05) for Select steaks, intermediate (P < 0.05) for Low Choice steaks, and lower (P <0.05) for Premium Choice or Prime steaks. Steaks in the very tender category had the lowest (P < 0.05) percentage of zero bids, and steaks in the slightly tough and very tough categories had the highest (P < 0.05) percentage of zero bids submitted from "buyers" in the auction. Premium Choice and Prime steaks were valued higher (P < 0.05) than Select steaks by consumers. On average, Premium Choice steaks received a 0.89 dollars/kg premium, and Prime steaks received a 2.47 dollars/kg premium over the mean bid price for Select steaks. Predicted mean bid prices for steaks decreased by 1.02 dollars/kg for each 1 kg increase in WBSF value. On average, steaks in the very tender marketing category received a higher (P < 0.05) bid price than the bid price for steaks in the slightly tender, slightly tough, and very tough categories (+0.83 dollars/kg, +2.09 dollars/kg, and +2.55 dollars/kg, respectively). Mean bid prices for steaks from the slightly tough and very tough categories did not differ (P = 0.184). Compared with the mean bid price for steaks in the slightly tender category, steaks from the slightly tough and very tough categories were discounted (P < 0.05) by 1.26 dollars/kg and 1.72 dollars/kg, respectively. Results suggest that marbling score and WBSF influence both the probability that consumers will purchase and the price they are willing to pay for strip loin steaks.

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We analyze one of the most important phenomena of emerging B2B markets, their impact in promoting changes in contracting for the same goodstraded on the B2B exchange. This trend is especially important in capital-intensive industries, where improvements in ne-tuning the coordination of supply and demand carry large economic bene ts. The spot market information conveyed through B2B transactions has become the basis in many of these markets for de ning options, terms of trade and contracting terms for long-term contracts that are benchmarked on the shortrun B2B transactions. This paper notes a broad set of goods and services currently being traded in both B2B short-run markets and longer-term contract markets, and reviews the economic and managerial frameworks that have been proposed to explain the structure of these markets and interdependent contracts. We provide several examples to illustrate the theoretical underpinnings, which derive from contract theory, auction theory and options theory. We then provide a framework based on transactions cost economics, codi ability in B2B exchanges and short-run and long-run competition to shed light on the nature of B2B exchanges in capital-intensive industries and their integration with contracting innovations that are being engendered by these exchanges.

This work measures the impact of captive supplies, or cattle procured through alternative marketing agreements (AMAs), on meatpacker costs, gross margins, and profits. Confidential profit and loss data were examined from all the individual packing plants within the four largest packing firms for a 30-month period. Alternative marketing agreement use resulted in improved beef supply chain efficiency, product demand, and plant profitability. The slaughter and processing costs were lower for plants with higher volumes of AMA cattle relative to cash market cattle. Plants that slaughter cattle from AMA sources operated at higher volumes, had less variable volumes, and had lower average total costs per head because of the substantive economies of size. Plants that slaughter cattle from AMA sources also had higher gross margins and average profits per head. The general conclusion is clear: If policies are implemented that limit AMA use then packing industry efficiency would be negatively impacted. [EconLit Citation: Q130]. © 2010 Wiley Periodicals, Inc.