Interlocked village markets and trader idiosyncrasy in rural india

Subramanian, A. and Qaim, M. (2011) Interlocked village markets and trader idiosyncrasy in rural india. Journal of Agricultural Economics, 62(3), pp. 690-709. (doi:10.1111/j.1477-9552.2011.00309.x)

Subramanian, A. and Qaim, M. (2011) Interlocked village markets and trader idiosyncrasy in rural india. Journal of Agricultural Economics, 62(3), pp. 690-709. (doi:10.1111/j.1477-9552.2011.00309.x)

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Abstract

The role of traders and traditional exchange institutions has received little attention in empirical research on rural markets in developing countries. We use detailed data on transactions in a village commodity market in India and identify two observed anomalies: first, the repeal of the law of one price, and second, a trader-idiosyncratic effect, namely that large volumes are sold to a trader who does not offer the best price. Econometric analysis demonstrates that trader idiosyncrasy can largely be explained by reciprocity motives in interlocked village markets. Reciprocity leads to market inefficiencies and can result in unexpected supply responses.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Subramanian, Dr Arjunan
Authors: Subramanian, A., and Qaim, M.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of Agricultural Economics
ISSN:0021-857X
ISSN (Online):1477-9552
Published Online:06 August 2011

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