Informal-contract farming in an agriculture supply chain: a game-theoretic analysis Online publication date: Wed, 16-Mar-2022
by Shivshanker Singh Patel
International Journal of Operational Research (IJOR), Vol. 43, No. 1/2, 2022
Abstract: A contract in an agriculture supply-chain under market uncertainty leads to renege. Specially, when the contract enforcement cost is not very high it is prone to collapse. In this paper, a set of game theoretical models have been employed to analyse renege of the contract farming (informal-contract). To start with a normal form game-theoretic model with pure strategies has been utilised to model the price risk of the market and determine the outcomes for the players (firm and farmer); subsequently, a mixed strategy model has been studied. Owing to incomplete information under the informal-contract, a Bayesian Nash equilibrium and mixed strategy Bayesian Nash equilibrium have also been analysed. The results have been explained with an example of tomato contract farming of Southern India. From the business standpoint the results and renegotiation framework presented in this paper can be utilised to avoid a renege and dispute in the contract farming.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Operational Research (IJOR):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook