The Matching Problem (and Inventories) in Private Negotiation

12 Pages Posted: 24 Apr 2020

See all articles by Dale J. Menkhaus

Dale J. Menkhaus

University of Wyoming

Owen R. Phillips

University of Wyoming

Christopher T. Bastian

University of Wyoming

Lance B. Gittings

University of Wyoming

Multiple version iconThere are 2 versions of this paper

Date Written: November 2007

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.

Keywords: advance production, bilateral bargaining, buyer concentration, matching risk

Suggested Citation

Menkhaus, Dale J. and Phillips, Owen R. and Bastian, Christopher T. and Gittings, Lance B., The Matching Problem (and Inventories) in Private Negotiation (November 2007). American Journal of Agricultural Economics, Vol. 89, Issue 4, pp. 1073-1084, 2007, Available at SSRN: https://ssrn.com/abstract=3583784 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

Box 3434 University Station
Laramie, WY 82070
United States

Christopher T. Bastian

University of Wyoming

Lance B. Gittings

University of Wyoming

Box 3434 University Station
Laramie, WY 82070
United States

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