Discussion Board

Written by Carolyn Olortegui and Alex Caron

 

The Players: Cashew Nut Traders, Tanzanian President John Magufuli

The Strategies:

- Tanzanian President John Magufuli has set an ultimatum on the Tanzanian cashew trade. Currently, the international cashew market is a central pillar in the Tanzanian economy. The Tanzanian economy is dependent on its ability to export cashews. Knowing this, cashew farmers have been refusing to sell to traders until a higher price is offered. Magufuli has now stated that if traders continue to barter below the approved price, he will send military troops and trucks to take the whole crop hostage.

- Traders of cashew nuts over the past few weeks have been refused service from farmers. Traders are holding out, knowing that eventually the farmers will need to sell their crops. They are counting on the fact that the farmers would prefer something to nothing.

The Payoffs:

- Magufuli’s strategy puts the game of chicken into motion, with a mutually assured destruction on one end, and the requirement of one party swerving to avoid it. He is hoping that the traders will swerve first, and offer to pay for the crop at his established price. If this happens, crisis will be averted, farmers will be happy and the economy will continue to chug on in Tanzania.

The traders could hold out until the president takes the crops, we do not know if/what the plan would be from there, once the cashews are in custody they still need to be sold somewhere for them to be valuable. Assuming no one else will

take the crop the traders could refuse to swerve and call the president’s bluff. The payoff would be some incredibly low priced base goods that would expand the traders profit margin.

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