de Guzman, Reinier2024-11-142024-11-142019-07https://selib.upd.edu.ph/etdir/handle/123456789/1341This paper investigates an informal contract enforcement mechanism that could induce positive-sum transactions between a firm and farmers. There is a hold-up problem of firms not engaging with smallholders given the risk of side-selling. I examine the experience of Lamac Multipurpose Cooperative in buying vegetable produce from smallholders and selling these to institutional markets. I model this as a repeated game between the cooperative and the individual farmer. The model predicts that a stronger family network reduce the optimal price that the cooperative would need to offer to a farmer in order to make it rational for her to honor the contract. Data on committed delivery, actual sales, and farmers’ network centrality measure are used to test this.enHold up problemContract enforcementFamily networkThesis