THIS PROPOSAL IS A RESEARCH PROJECT FOR THE ECONOMICS, MARKETS, AND TRADE (EMT) PROGRAM WITHIN THE AGRICULTURAL ECONOMICS AND RURAL COMMUNITIES PRIORITY AREA UNDER THE AFRI FOUNDATIONAL PROGRAM. THIS PROPOSAL RESPONDS TO THE EMT STATED PRIORITY OF DEVELOPMENT OF THEORIES, METHODS AND APPLICATIONS OF ECONOMICS...IN THE AREAS OF...AGRICULTURAL MARKET STRUCTURE AND PERFORMANCE; AGRICULTURAL POLICY DESIGN AND IMPACTS; TECHNOLOGY DEVELOPMENT AND ADOPTION. THIS PROJECT AIMS AT DEVELOPING THEORY AND METHODS THAT WILL PERMIT EX-ANTE AND EX-POST ECONOMIC EVALUATION OF POLICIES IN THE AGRICULTURAL AND FOOD SECTORS; ESPECIALLY THOSE THAT CAN ALTER THE SPECTRUM OF PRODUCT VARIETY ACCESSIBLE TO CONSUMERS.RELIABLE MEASUREMENT OF WELFARE IMPLICATIONS OF FOOD POLICIES REQUIRES UNBIASED ESTIMATION OF STRUCTURAL PARAMETERS. UNBIASED ESTIMATION OF STRUCTURAL PARAMETERS IN STRATEGIC SETTINGS (INCREASINGLY COMMON IN FOOD MARKETS DUE TO PRODUCT DIFFERENTIATION) HINGES UPON CORRECT SPECIFICATION OF THE MODE OF COMPETITION (I.E. PLAYERS' STRATEGIES AND THE RESULTING EQUILIBRIUM CONCEPT). YET, LITTLE THEORETICAL GUIDANCE AND NO EMPIRICAL TESTING IS AVAILABLE TO UNDERSTAND AND PREDICT HOW AND WHEN SPECIFIC MODES OF COMPETITION EMERGE IN EQUILIBRIUM OR TO GUIDE ECONOMETRIC ESTIMATION. WE PROPOSE TO ADDRESS THIS IMPORTANT GAP THROUGH THE FOLLOWING STEPS. FIRST, WE WILL GENERATE THEORETICAL PREDICTIONS REGARDING MODES OF COMPETITION BY INTEGRATING FRAGMENTED STRANDS OF THE THEORY OF OLIGOPOLY INTERMEDIATION. SECOND, WE WILL CONDUCT EXPERIMENTS BASED ON THE THEORY. SINCE EXPERIMENTS ALLOW US TO CONTROL THE GAME FORM AND MODE OF COMPETITION, SPECIFY THE ECONOMIC PRIMITIVES, AND OBSERVE THE STRATEGIES USED BY THE PLAYERS, WE WILL HAVE A MUCH DEEPER KNOWLEDGE OF THE DATA GENERATING PROCESS THAN WHAT IS TYPICALLY AVAILABLE TO THE ECONOMETRICIAN USING OBSERVATIONAL DATA. THIRD, WE WILL CONDUCT STRUCTURAL ECONOMETRIC ANALYSIS OF THE EXPERIMENTAL DATA. WE WILL DO THIS BY TREATING EXPERIMENTAL DATA AS IF IT WERE OBSERVATIONAL (I.E. WE WILL ASSUME STRUCTURAL PARAMETERS ARE UNOBSERVABLE TO THE RESEARCHER) AND IMPOSING COMMONLY INVOKED ASSUMPTIONS IN THE STRUCTURAL ECONOMETRICS LITERATURE ABOUT THE NATURE OF THE GAME PLAYED, THE EQUILIBRIUM CONCEPT, AND THE UNDERLYING ECONOMIC PRIMITIVES. WE CAN THEN COMPARE THE RESULTS TO THE RESULTS THAT ARE GENERATED UNDER THE CORRECT ASSUMPTIONS ABOUT THE DATA GENERATING PROCESS TO EVALUATE BIASES ARISING FROM MISS-SPECIFICATION. WE CAN ALSO IDENTIFY WHICH ASSUMPTIONS ARE ROBUST TO MISSPECIFICATION. FINALLY, WE WILL IDENTIFY THE LINK BETWEEN ESTIMATION BIAS AND OBSERVABLE PRIMITIVES, STRATEGIES, AND MODE OF COMPETITION. WE EXPECT THAT THESE TASKS, IN COMBINATION, WILL RESULT IN GUIDING PRINCIPLES THAT INFORM STRUCTURAL ECONOMETRIC MODELING UNDERPINNING WELFARE ANALYSIS OF MODERN FOOD POLICIES.