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Research Bulletin (Iowa Agriculture and Home Economics Experiment Station)

Abstract

Bargaining power can be defined as the degree of influence one party has over another to force concessions or to effect agreements on one's own terms. Such power can be divided into two types. Type I bargaining power refers to the advantages that can be offered to the opponent in return for accepting one's terms. Type II bargaining power refers to the unfavorable consequences that can be forced upon the opponent for refusing to accept the stated terms. The purpose of this study was to determine means available to dairy bargaining cooperatives to obtain bargaining power. Several hypotheses were developed from economic and organization theory and from laboratory experiments on bargaining behavior. A personal-interview survey of 10 dairy bargaining cooperatives in the North Central Region was conducted to obtain information to test these hypotheses.

A ranking of seven objectives by each of nine cooperative managers showed that maintaining a market for members' milk was generally ranked most important, while increasing the size of the procurement area was generally ranked least important.

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