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Article • Rev. Bras. Econ. 69 (4) • Dec 2015 • https://doi.org/10.5935/0034-7140.20150024   copy

Auctioning off Prizes for Agricultural Product Flow under a Policy of Minimum Prices* 1 Most studies only describe the PEP as an instrument of the Policy on Guaranteed Minimum Price of the Brazilian government (see, for example, Bel Filho & Bacha, 2005). The study carried out by Pereira & Vieira (2009) is an exception, since it analyzed the auctions of the PEP, although superficially.

Authorship SCIMAGO INSTITUTIONS RANKINGS

In this article, we analyze the use of descending clock auctions in the implementation of a minimum pricing policy. This type of auction has been used by the Brazilian government policy of support for agricultural prices. We propose a clock auction model along the lines used by the Brazilian government and derive its main implications. Based on data from auctions already held and implications of the theoretical model, we conclude that the following factors are crucial to minimize the costs of implementing a minimum price policy via auctions: the choice of product to be auctioned, amount auctioned, reserve price (maximum prize), and auction rules.

Keywords:
Auctions; Agricultural Policy; Price Support; Brazil

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