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| Kuiper, W. Erno; Kuwornu, John K.M.; Pennings, Joost M.E.. |
| We apply the classic agency model to investigate risk shifting in an agricultural marketing channel, using time series analysis. We show that if the principal is risk-neutral and the agent is risk-averse instead of risk-neutral, then a linear contract can still be optimal if the fixed payment is negative. Empirical results for the Dutch potato marketing channel indicate that while fixed payments to farmers (agents) have decreased over time, even to negative levels, the incentive intensity has approximately doubled, and the risk premium the farmers ask for has remained considerable. These results imply that risk has shifted from wholesalers, processors, and retailers to farmers; we argue that this shift could be the consequence of chain reversal, i.e., the... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Marketing; Risk and Uncertainty. |
| Ano: 2003 |
URL: http://purl.umn.edu/22046 |
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| Pennings, Joost M.E.; Isengildina, Olga; Irwin, Scott H.; Good, Darrel L.; Garcia, Philip; Frank, Julieta; Kuiper, W. Erno. |
| Producers have a wide variety of risk management instruments available. How do producers make a choice of risk management instruments? Using the recently developed choice bracketing framework, we examine what risk management strategies producers use and identify the factors that drive their risk management decisions. Our results identify that producers use a wide variety of combinations of risk management instruments and that they bracket their choices into sets of alternative risk management instruments. Using multinomial logit models to estimate the choice process provides information about the factors that influence producers' decision making. The results show that broad bracketing producers use different risk management instruments than narrow... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Risk and Uncertainty. |
| Ano: 2005 |
URL: http://purl.umn.edu/19550 |
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| Kuwornu, John K.M.; Kuiper, W. Erno; Pennings, Joost M.E.; Meulenberg, Matthew T.G.. |
| We specify a principal-agent marketing channel involving producers, wholesalers, retailers and a futures market. Our hedge ratio for producers appears to be much lower than the common price-risk minimising ones as we account for producers vertical contracts and, by using annual data, their production horizon. The Dutch ware potato marketing channel and its futures market in Amsterdam show that possibly through decreases in producers and wholesalers risk aversions, their optimal dynamic hedge ratios decreased from 38% and 12%, respectively, in 1982 to 18% and 10%, respectively, in 2003. These results comply with the decreased futures volume traded in Amsterdam over the years. |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Principal-Agent Model; Risk Management; Futures and Spot Market Contracts; Production Horizons; Food Marketing Channels; Marketing; Risk and Uncertainty. |
| Ano: 2006 |
URL: http://purl.umn.edu/7755 |
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| Kuwornu, John K.M.; Kuiper, W. Erno; Pennings, Joost M.E.; Meulenberg, Matthew T.G.. |
| We examine the interaction of marketing channel members and the influence of these interactions on incentives, coordination costs, and risk allocation strategies in a food marketing channel. For this purpose we specify a three-stage principal-agent marketing channel model involving producers, wholesalers, retailers and a futures market. We compare the situation with and without futures market. The empirical results regarding the Dutch ware potato marketing channel during 1971-2003 reveals that, possibly as a result of increases in incentives to producers and wholesalers, the coordination costs of the marketing channel decreased significantly, both with and without futures trade. The coordination costs of a marketing channel with a futures market are lower... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Contracts; Risks; Coordination Costs; Futures Markets; Food Marketing Channels; Agribusiness; Marketing. |
| Ano: 2006 |
URL: http://purl.umn.edu/7740 |
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| Kuwornu, John K.M.; Kuiper, W. Erno; Pennings, Joost M.E.; Meulenberg, Matthew T.G.. |
| Food-supply chains have become extensively vertically coordinated through the use of contracts as an organizational response to satisfy the needs of consumers in the saturated food markets of the industrialized countries. The contracts involved must establish an optimal trade-off between incentive provision and risk reduction. Agency theory can be used to model this trade-off. We show how to do this in a three-stage (producer, wholesaler, retailer) principal-agent supply-chain model. Its application to the Dutch supply chain of ware potatoes shows that during the period 1961-2002, retailers have been able to provide more incentives to the wholesalers and producers and as a consequence the costs of coordination in the supply chain decreased. |
| Tipo: Journal Article |
Palavras-chave: Agribusiness. |
| Ano: 2005 |
URL: http://purl.umn.edu/26758 |
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