Potential collusion and trust: Evidence from a field experiment in Vietnam

Maximo Torero and Angelino Viceisza

African Journal of Agricultural and Resource Economics, 2016, vol. 11, issue 01, 11

Abstract: In a typical contract farming arrangement, a firm contracts a farmer to deliver a certain quantityquality combination of a product at a certain point in time for payment at a specified price based on quality attributes. These arrangements tend to be subject to lack of ‘trust’ on both sides, since they typically are subject to asymmetric information because quality attributes are unobservable and costly to assess. We conducted variants of framed trust games using contract dairy farmers in Vietnam as first movers to assess (1) baseline trust between these farmers and the firm that contracts them and (2) the impact of potential collusion between the firm and a third party on trust. While farmers are more likely to trust in the presence of the third party, potential collusion does not significantly reduce their propensity to trust. We discuss the external validity of our findings and some implications for policy.

Keywords: Crop Production/Industries; Farm Management; International Development (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Potential collusion and trust: Evidence from a field experiment in Vietnam (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:afjare:233846

DOI: 10.22004/ag.econ.233846

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