In the basic two-period model, a farmer and a middleman trade with one
another. The middleman is informed about the market price for the good that
they are trading while the farmer knows only the distribution of prices. The
farmer has an outside option to go to the market himself but faces high transport
costs. He may encounter one of two types of middlemen. The ‘good’ type cares
about fairness and splits the gains from trade equally with the farmer. The
‘bad’ type behaves strategically and aims to maximize the sum of his gains
from the two periods. The field experiment reported on here is mapped closely
on to the set-up of the model. It is used to investigate whether the posited
heterogeneity among middlemen is observed in reality. Also, by exogenously
varying the cost of switching to a different middlemen it is possible to test the
prediction that the benefit of information varies with the degree of competition
between middlemen