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

15 Pages Posted: 28 Apr 2020

See all articles by Dale J. Menkhaus

Dale J. Menkhaus

University of Wyoming

Owen R. Phillips

University of Wyoming

Alla V. Yakunina

Saint Petersburg State University of Economics and Finance

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Date Written: May 2009

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.

Keywords: information, laboratory markets, private negotiation

Suggested Citation

Menkhaus, Dale J. and Phillips, Owen R. and Yakunina, Alla V., Inventories and Public Information in Private Negotiation: A Laboratory Market Study (May 2009). American Journal of Agricultural Economics, Vol. 91, Issue 2, pp. 503-517, 2009, Available at SSRN: https://ssrn.com/abstract=3585358 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

Box 3434 University Station
Laramie, WY 82070
United States

Alla V. Yakunina

Saint Petersburg State University of Economics and Finance ( email )

Sadovaya st. 21
Saint Petersburg, 191023

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