Economic analysis reveals opening with high offers, small concessions, and fallback options improves commodity prices for agricultural sellers, indicating actionable bargaining advantages.
A large percentage of agricultural commodity sales are transacted via private negotiation. Research suggests sellers are disadvantaged when negotiating because of the lack of information on private transactions and risks they face, especially after incurring production costs. Finding ways to better seller outcomes is important for their financial welfare and overall market efficiency. We examine what bargaining strategies offer the most promise for improving seller outcomes. Our results indicate encouraging sellers to make the first move with a high offer—and making small concessions during negotiation—best helps them improve sale price. Additionally having an alternative sale outlet if the current negotiation fails improves their outcome.
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Bastian et al. (2026) studied this question.
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