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| Feil, Jan-Henning; Musshoff, Oliver; Balmann, Alfons. |
| In recent years, the dairy sector has been exposed to strong changes in general conditions and extreme fluctuations in milk prices. Farmers and lobbyists have therefore asked politicians for additional market regulation. In this paper an agent-based real options market model is developed, which allows the analysis of the effects of different political schemes on the willingness to invest, firm profitability and economic efficiency in the dairy sector. The model results show that political schemes generally increase the willingness to invest in competitive markets under consideration of real options effects. However, they do not offer any substantial financial benefits to the producers and can cause a significant reduction in welfare. Furthermore, the... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Real Options; Competition; Policy Impact Analysis; Dairy Sector; Agricultural and Food Policy; D81; Q12; Q18. |
| Ano: 2011 |
URL: http://purl.umn.edu/100039 |
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| Feil, Jan-Henning; Musshoff, Oliver. |
| In consequence of changes in general conditions, a higher level of investments and disinvestments in agriculture can be expected. To date, however, there are no policy impact analyses on both investments and disinvestments in competitive agricultural markets in a dynamic-stochastic context. This paper aims to develop a conceptual real options market model, which allows the impact assessment of different political schemes on investment and disinvestment thresholds and the sectoral welfare. Exemplarily, the effects of price floors, investment subsidies and production ceilings are analysed. The results show that the consideration of limited reversibility, that is disinvestments, is of relevance as it can impact the assessment of specific policies. |
| Tipo: Presentation |
Palavras-chave: Real options; Competition; Policy impact analysis; Genetic algoritms; Marketing; Political Economy. |
| Ano: 2012 |
URL: http://purl.umn.edu/124294 |
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