Inventories and Public Information in Private Negotiation: A Laboratory Market Study

Posted: 27 Apr 2009

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

Alla V. Yakunina

Saint Petersburg State University of Economics and Finance

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Abstract

Using laboratory markets, this research investigates the impacts of reporting different kinds of aggregated trade information to buyers and sellers who conduct transactions through bilateral/private negotiation. There are a limited number of bargaining rounds or matches between buyer and seller pairs. Sellers hold a perishable inventory before negotiations begin. We find that knowledge of trades, along with price, improves the coordination and bargaining position of buyers. Trade prices are lower and buyer earnings are higher, relative to the no-information treatment or when just-past quantities or just-past prices are reported. Market efficiency declines as public information is reported.

Suggested Citation

Menkhaus, Dale J. and Phillips, Owen R. and Yakunina, Alla V., Inventories and Public Information in Private Negotiation: A Laboratory Market Study. American Journal of Agricultural Economics, Vol. 91, No. 2, pp. 503-517, May 2009, Available at SSRN: https://ssrn.com/abstract=1375812 or http://dx.doi.org/10.1111/j.1467-8276.2009.01253.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)

Alla V. Yakunina

Saint Petersburg State University of Economics and Finance ( email )

Sadovaya st. 21
Saint Petersburg, 191023

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