Who Is a Better Bargainer?

ABSTRACT This study introduces a sophisticated model for evaluating bargaining power within the agricultural production service market, using data from China's Land Economy Survey and the bilateral stochastic frontier model. The findings indicate: (1) Suppliers elevate prices by 26.77% above the benchmark, while demanders reduce them by 24.36%, culminating in a market price that surpasses the benchmark. (2) Labor outflow and aging populations drive suppliers to further increase market prices. (3) Variations in individual characteristics underpin the disparity in bargaining power between suppliers and demanders. The study underscores the disadvantaged and heterogeneous nature of farmers (demanders), advocating for a recalibration of subsidy distribution to benefit farmers directly, rather than agricultural production service organizations, and the establishment of differentiated subsidy systems.