Experimental evidence of bargaining power in agricultural land markets

Marlene Kionka, Todd Kuethe, Oliver Mußhoff, Matthias Ritter and Martin Odening

European Review of Agricultural Economics, 2024, vol. 51, issue 5, 1273-1311

Abstract: There is public concern about the degree to which rising farmland rental rates are driven by the perceived market influence of non-agricultural actors. We conduct a structural estimation to analyse the potential bargaining power of different types of actors in the farmland market. It allows us to infer their latent reservation utilities by exploiting equilibrium conditions, derived from a stochastic ultimatum game. Reservation utilities reflect outside options in negotiations, as they are determinants of bargaining power. We conduct economic experiments in the rental market. Our findings show that farmers and local actors have more bargaining power than non-farmers and absentee actors, respectively.

Keywords: agricultural land market; bargaining power; structural estimation; stochastic ultimatum game; economic experiments (search for similar items in EconPapers)
Date: 2024
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