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Library Coordination and allocation on land markets under increasing scale economies and heterogeneous actors - An experimental study

Coordination and allocation on land markets under increasing scale economies and heterogeneous actors - An experimental study

Coordination and allocation on land markets under increasing scale economies and heterogeneous actors - An experimental study

Resource information

Date of publication
april 2010
Resource Language
ISBN / Resource ID
AGRIS:US2016214487

Economies of scale and scope are often not exploited in Western agriculture. A general reason is probably that various types of transaction costs limit coordination among farmers. A more specific explanation is that coordination on land markets or machinery cooperation is difficult to achieve when farmers are heterogeneous as some kind of price differentiation is necessary for a Pareto-superior solution. This paper investigates experimentally such a coordination game with heterogeneous agents using an example inspired by agricultural land markets. The experimental findings suggest that a Pareto-optimal solution may not be found when agents are heterogeneous. The findings provide evidence for market failures and cooperation deficits as reasons for unexploited economies of scale in agriculture. Our findings are consistent with coordination failures that appear to be driven by behavioural factors such as anchoring-and-adjustment, inequity aversion, and a reverse form of winner’s curse.

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Authors and Publishers

Author(s), editor(s), contributor(s)

Balmann, Alfons
Kellermann, Konrad
Larsen, Karin
Sandri, Serena
Schade, Christian

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