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Coordination and Differentiation of Strategies: The Impact on Farm Growth of Strategic Interaction on the Rental Market for Land

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  • Margarian, Anne

Abstract

differences in farm-development strategies can be observed. The land market has been identified in the literature as crucial for farm growth. In various studies, developments are driven by assumptions about the effects of scale and the initial heterogeneity of farms. In contrast, the present paper focuses on the potential role of opportunistic and future behaviour for the development of different farm strategies. In order to demonstrate the potentially crucial role of strategic behaviour, we introduce a thought experiment and focus on the theoretical case of identical farms. In the light of ideas from theories about oligopolistic markets, two central problems of decisionmaking are identified: the coordination problem of farm exits and the problem of strategic choices made by the remaining farms. This paper supplements explanations that argue on the basis of farms’ heterogeneity in that it offers an approach to the question of why farms might not overcome their short-term constraints in order to realise strategic advantages in competition. Regionale Unterschiede in den Betriebsentwicklungsstrategien der landwirtschaftlichen Familienbetriebe der westlichen Bundesländer Deutschlands sind beobachtbar. Der Bodenmarkt wurde in der Literatur als zentraler Faktor für das Wachstum landwirtschaftlicher Betriebe identifiziert. Normalerweise wird die Entwicklung in entsprechenden Studien durch Annahmen über Skaleneffekte und die anfängliche Heterogenität der Betriebe bestimmt. Im Gegensatz dazu steht im vorliegenden Papier die Rolle zukunftsgerichteten und opportunistischen Verhaltens für die Entwicklung unterschiedlicher Betriebsstrategien im Vordergrund. Um die möglicherweise zentrale Rolle strategischen Verhaltens zu verdeutlichen, wird in einem Gedankenexperiment der theoretische Grenzfall identischer Betriebe untersucht. Im Lichte von Ideen aus Theorien zum oligopolistischen Wettbewerb werden so zwei zentrale Entscheidungsprobleme ausgemacht: Das Koordinierungsproblem der Betriebsaufgabe und das Problem der Strategiewahl der verbleibenden Betriebe. Der Beitrag ergänzt die Erklärungen, die von betrieblicher Heterogenität ausgehen, indem ein Erklärungsansatz dafür angeboten wird, warum Betriebe nicht ihre kurzfristigen Restriktionen überwinden, um sich so einen strategischen Vorteil im Wettbewerb zu sichern.

Suggested Citation

  • Margarian, Anne, 2010. "Coordination and Differentiation of Strategies: The Impact on Farm Growth of Strategic Interaction on the Rental Market for Land," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 59(03), pages 1-15, September.
    • Handle: RePEc:ags:gjagec:145294
    DOI: 10.22004/ag.econ.145294
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    References listed on IDEAS

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    1. Bergstrom, Theodore C & Stark, Oded, 1993. "How Altruism Can Prevail in an Evolutionary Environment," American Economic Review, American Economic Association, vol. 83(2), pages 149-155, May.
    2. Michael Boehlje, 1992. "Alternative models of structural change in agriculture and related industries," Agribusiness, John Wiley & Sons, Ltd., vol. 8(3), pages 219-231.
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    Cited by:

    1. Hüttel, S. & Wildermann, L., 2015. "Price formation in agricultural land markets – how do different acquiring parties and sellers matter?," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 50, March.
    2. Stefan Seifert & Christoph Kahle & Silke Hüttel, 2021. "Price Dispersion in Farmland Markets: What Is the Role of Asymmetric Information?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1545-1568, August.
    3. Uehleke, Reinhard & Petrick, Martin & Hüttel, Silke, 2022. "Evaluations of agri-environmental schemes based on observational farm data: The importance of covariate selection," Land Use Policy, Elsevier, vol. 114(C).
    4. Seidel, Claudia & Shang, Linmei & Britz, Wolfgang, 2023. "A critical assessment of neural networks as meta-model of a farm optimization model," Discussion Papers 338200, University of Bonn, Institute for Food and Resource Economics.

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