Pricing negotiation in contract farming

Yuanita Handayati, Togar Simatupang, Tomy Perdana and Manahan Siallagan

International Journal of Business and Globalisation, 2019, vol. 23, issue 2, 174-192

Abstract: An agricultural pricing mechanism achieved through a process of negotiation is superior to cost-based or auction-based pricing in achieving goal congruence and evaluating subunit performance. This paper illustrates the negotiation process in defining agricultural prices by considering the emotions of negotiators. The emotions of both buyer and seller are captured to illustrate the impact on the duration, agreed price and result of negotiations. The simulation shows that when both buyer and seller experience heightened emotions, the shortest negotiations are achieved. On the other hand, the most protracted negotiations, which usually culminate in failure, result when both buyer and seller exhibit anger. Moreover, different combinations of emotions on the part of the buyer and seller suggest that stable emotions will produce a mutually acceptable price. Agent-based modelling was used as the methodology to simulate the price negotiation process.

Keywords: price negotiation; contract farming; emotions; agent-based modelling. (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=102460 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbglo:v:23:y:2019:i:2:p:174-192

Access Statistics for this article

More articles in International Journal of Business and Globalisation from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().