Competition, Kinship or Reciprocity? Village Experiments in Alternative Modes of Exchange
AbstractIn this paper, detailed data on transactions in a village commodity market are used to explain the puzzle of sluggish agricultural supply response. We show that existence of reciprocity among sellers exhibits multiple equilibria and creates trade diversion. Large volumes of the commodity are sold to a trader who does not offer the best price, but on whom sellers depend through transactions in other markets. An implication of this trader-idiosyncratic effect on supply is that policies that affect prices may result in different supply responses.
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Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25434.
Date of creation: 2006
Date of revision:
Reciprocity; Kinship; Neighborhood effects; Trader idiosyncrasy; Equilibrium; Consumer/Household Economics;
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