The Matching Problem (and Inventories) in Private Negotiation

Posted: 1 Oct 2007

See all articles by Dale J. Menkhaus

Dale J. Menkhaus

University of Wyoming

Owen R. Phillips

University of Wyoming - College of Business - Department of Economics and Finance

Chris T. Bastian

University of Wyoming

Lance B. Gittings

University of Wyoming

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Abstract

This study examines laboratory market outcomes under alternative matching risk scenarios and advance production. Limited access and/or asymmetry in the number of buyers and sellers cause a matching problem. When sellers hold inventory before sale and there is buyer concentration, prices are about 23% below the competitive level and close to the predicted monopsony price. The bargaining advantage shifts to buyers in this market environment. Sellers can benefit by creating alliances or cooperatives to increase their bargaining position for price and overcome poor access to buyers.

Suggested Citation

Menkhaus, Dale J. and Phillips, Owen R. and Bastian, Chris T. and Gittings, Lance B., The Matching Problem (and Inventories) in Private Negotiation. American Journal of Agricultural Economics, Vol. 89, No. 4, pp. 1073-1084, November 2007, Available at SSRN: https://ssrn.com/abstract=1018132 or http://dx.doi.org/10.1111/j.1467-8276.2007.01033.x

Dale J. Menkhaus (Contact Author)

University of Wyoming ( email )

Box 3434 University Station
Department of Applied Agricultural Economics
Laramie, WY 82071
United States
307-766-5128 (Phone)
307-766-5544 (Fax)

Owen R. Phillips

University of Wyoming - College of Business - Department of Economics and Finance ( email )

P.O. Box 3985
Laramie, WY 82071-3985
United States
307-766-2195 (Phone)
307-766-5090 (Fax)

Chris T. Bastian

University of Wyoming ( email )

Box 3434 University Station
Department of Agricultural and Applied Economics
Laramie, WY 82071
United States
(307) 766-4377 (Phone)

Lance B. Gittings

University of Wyoming

Box 3434 University Station
Laramie, WY 82070
United States

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