Farmer bargaining when purchasing machinery and fertilizer: A study in commercial negotiation
✍ Scribed by James H. Tiessen; Thomas F. Funk
- Publisher
- John Wiley and Sons
- Year
- 1993
- Tongue
- English
- Weight
- 800 KB
- Volume
- 9
- Category
- Article
- ISSN
- 0742-4477
No coin nor oath required. For personal study only.
✦ Synopsis
Bargaining is a significant part of the business of farming. The 1986 Canadian Census of Agriculture showed that in 1985 the average Ontario farm business operating expense was approximately $65,000. * Virtually all of these input purchases (including fertilizer, feed, and fuel) are negotiable. It is common knowledge that the list price is rarely paid. Certainly, all farmers do not pay the same price for their inputs. This suggests many are saving money on inputs, and therefore increasing income through negotiation. Despite common knowledge of this phenomenon there is little empirical information on the actual degree of farmer bargaining, and the factors affecting it. The same can be said about commercial negotiation in other business sectors. Bargaining, in this study, describes the activity that occurs from the time the dealer states the initial terms of the sales offer until the final purchase decision is made by the farmer.
In general, the vast negotiation literature exhibits a reluctance to quantitatively test theory in the real world. Quantitative bargaining research is largely based on laboratory games such as the prisoner's dilemma (e. g., as reviewed by Rubin and Brown2 and Chertkoff and Esses), while prescriptive (e.g., as reviewed by Weiss-Wik") or t h e ~r e t i c a F -~ texts tend to use case studies and anecdotes to provide qualitative support for their views. This study investigates the consistency of principles derived from these sources with the actual practices of a group of commercial bargainers-input-buying farmers.