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Search Cost and Rural Producers' Trading Choice between Middlemen and Consumers in Bangladesh

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  • Shyamal K. Chowdhury

Abstract

This paper assesses the impact of search cost - as proxied by the cost of access to telephones - on small-scale producers' choice between trading with middlemen and trading directly with consumers. The empirical findings suggest that search cost plays a significant role in this choice and that a reduction in search cost increases the likelihood of trading with consumers. This result has important implications related to the provision of public telephones in rural areas of developing countries.

Suggested Citation

  • Shyamal K. Chowdhury, 2004. "Search Cost and Rural Producers' Trading Choice between Middlemen and Consumers in Bangladesh," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 522-541, September.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200409)160:3_522:scarpt_2.0.tx_2-m
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    References listed on IDEAS

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    1. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    2. Bayes, Abdul, 2001. "Infrastructure and rural development: insights from a Grameen Bank village phone initiative in Bangladesh," Agricultural Economics, Blackwell, vol. 25(2-3), pages 261-272, September.
    3. Gary Biglaiser, 1993. "Middlemen as Experts," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 212-223, Summer.
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    Cited by:

    1. Chowdhury, Shyamal & Gulati, Ashok & Gumbira-Sa'id, E., 2005. "High value products, supermarkets and vertical arrangements in Indonesia," MTID discussion papers 83, International Food Policy Research Institute (IFPRI).

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    More about this item

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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