There are a number of characteristics of the relationship between a farmer and
a middleman that are specific to a developing country setting. The key characteristics
that I will focus on in this paper are the following: (i) middlemen are
better informed about market conditions than farmers, (ii) farmers face high
transport costs to go to the market themselves, (iii) farmers often trade with
the same middleman for multiple periods, and (iv) the existence of frictions in
the market means it is not costless for the farmer to find a different middleman
to trade with. The model presented in this section will aim to capture these
characteristics in the simplest way possible.