Bargaining power in mango supply chains: An experimental gaming approach

Transactions between producers, traders, retailers and consumers in the mango supply chain are characterised by contractual arrangements concerning outlet choice, price, volume, quality and frequency. We used a gaming simulation approach to identify the intrinsic agency characteristics that typically result in specific contracts and assess the underlying differences in perceived bargaining power and that are conducive for reaching these arrangements. A stylised mango chain game is developed that permits the appraisal of different sets of delivery transactions. Agency roles are defined for all participants in the mango supply chain. Attributes of all transactions are recorded, also permitting contract breach, hold-up and repeated contracts. Bargaining power is assessed at a 10-point Likert scale and revenue distribution is measured in terms of money. The game has been played five times with different groups of mango producers, resulting in a data set of 82 transactions and 43 bargaining power positions. The game design closely mimics the negotiation conditions in the Costa Rican mango supply chain. The game results confirm the important role of trust and information exchange for reaching mutually acceptable contracts. Bargaining power is strongly related to the negotiation skills, wealth and partnerships of the negotiator. Revenue distribution is related to the bargaining power of the trade partner, risk and the length of the contract. Transparency and agency cooperation thus play important roles for improving the efficiency of mango supply chains in Costa Rica.