The impact of collective action and market prices

Abstract

PurposeThe purpose of this paper is to investigate whether the information sharing in an online discussion forum, over an agricultural market characterized by a large number of small-scale farmers, has an impact on the market prices.Design/methodology/approachAll the comments posted by farmers and traders on four storable items (potato, onion, lemon and apple) in an online discussion forum over 2013–2017 are collected. By using text mining techniques and regression analysis, words characterizing the actions and expectations of farmers and traders on the course of the market price are identified. Then, summary indicators pointing to positive and negative views on prices are calculated. Finally, the relation between these indicators and market prices is analyzed.FindingsThe results point to economically significant impacts, as one standard deviation increase in the share of net positive comments is associated with 20, 22, 13 and 10 percent increase in the consumer prices of potato, onion, lemon and apple, respectively within three months.Originality/valueOverall, this study provides an evidence for the link between information sharing of farmers on online domain and their collaboration in the physical domain. Thus, the study implies that the information synthesized from online discussion forums may actually contain valuable information for researchers and policy makers regarding the behavior of agents even on traditional domains such as agriculture.