Asymmetric Information and Middleman Margins: An Experiment with Indian Potato Farmers
Mitra, S., Mookherjee, D., Torero, M. & Visaria, S. 
ORCID: 0000-0001-7406-4929 (2018).
Asymmetric Information and Middleman Margins: An Experiment with Indian Potato Farmers.
The Review of Economics and Statistics, 100(1),
pp. 1-13.
doi: 10.1162/rest_a_00699
Abstract
West Bengal potato farmers cannot directly access wholesale markets and do not knowwholesale prices. Local middlemen earn large margins; pass-through from wholesale to farmgate prices is negligible. When we informed farmers in randomly chosen villages about wholesale prices, average farmgate sales and prices were unaffected, but pass-through to farmgate prices increased. These results can be explained by a model where farmers bargain ex post with village middlemen, with the outside option of selling to middlemen outside the village. They are inconsistent with standard oligopolistic models of pass-through, search frictions, or risk-sharing contracts.
| Publication Type: | Article |
|---|---|
| Additional Information: | © 2018 The President and Fellows of Harvard College and the Massachusetts Institute of Technology |
| Subjects: | H Social Sciences > HB Economic Theory S Agriculture > S Agriculture (General) |
| Departments: | Bayes Business School > Finance |
| SWORD Depositor: |
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