SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Ule, Aljaz; Goeree, Jacob K.; Riedl, Arno.

This paper reports results from a laboratory experiment on network formation among heterogeneous agents. The experimental design extends the Bala-Goyal (2000) model of network formation with decay and two-way flow of benefits by allowing for agents with lower linking costs or higher benefits to others. Furthermore, agents' types may be common knowledge or private information. In all treatments, the (efficient) equilibrium network has a "star" structure. With homogeneous agents, equilibrium predictions fail completely. In contrast, with heterogeneous agents stars frequently occur, often with the high-value or low-cost agent in the center. Stars are not born but rather develop: with a high-value agent, the network's centrality, stability, and efficiency all...

Receiving incorrect information is costly: Diffusion and accuracy of market information among farmers in northern Ghana

Palavras-chave: Network Formation; Experiment; Heterogeneity; Private Information; Institutional and Behavioral Economics; C72; C92; D82; D85.

Ano: 2007

URL: http://purl.umn.edu/9099

Zanello, Giacomo; Shankar, Bhavani; Srinivasan, Chittur S..

The recent adoption of Information Communication Technologies (ICTs, namely mobile phones and radios) in rural areas of Sub- Saharan Africa has brought new evidence that an updated and reliable flow of information can have direct benefits for farmers' welfare. However, if correct market information can benefit the users, incorrect information can be costly. In this study we explore the diffusion (quantity) and the accuracy (quality) of price information among farmers in northern Ghana, with a focus on the role of ICTs.

Tipo: Presentation

Palavras-chave: Market behaviour; Transaction costs; Information technologies; Consumer/Household Economics; International Development; Marketing; Research and Development/Tech Change/Emerging Technologies; D82; D83; D84; O12; O55.

Ano: 2012

URL: http://purl.umn.edu/123967

The Public Management of Risk: Separating Ex Ante and Ex Post Monitors

Hiriart, Yolande; Martimort, David; Pouyet, Jerome.

When a firm undertakes risky activities, the conflict between social and private incentives to implement safety care requires public intervention which can take the form of both monetary incentives but also ex ante or ex post monitoring, i.e., before or after an accident occurs. We delineate the optimal scope of monitoring depending on whether public monitors are benevolent or corruptible. We show that separating the ex ante and the ex post monitors increases the likelihood of ex post investigation, helps prevent capture and improves welfare.

Role of Panel Analysis in Identifying Asymmetric Information with Optional Unit Provision in Federal Crop Insurance

Palavras-chave: Risk Regulation; Monitoring; Capture; Integration; Separation; Financial Economics; L51; D82.

Ano: 2010

URL: http://purl.umn.edu/98454

When Promoters Like Scalpers

Shaik, Saleem.

This paper has a two-fold contribution, first we demonstrate the relationship of spatial, temporal and residual yield risk estimated from a two-way panel random effects model to asymmetric information with an optional unit provision in the federal crop insurance program. Second, the yield risk components are incorporated in a discrete choice model to examine the presence of asymmetric information due to potential yield switching with optional unit provisions. Empirical application to 1998 U.S. cotton crop insurance data reveals the presence of asymmetric information with optional unit provisions.

Tipo: Report

Palavras-chave: Adverse Selection; Moral Hazard; Optional Unit Policy; Crop Insurance; U.S. Cotton; Crop Production/Industries; Demand and Price Analysis; D82; G22; Q10.

Ano: 2009

URL: http://purl.umn.edu/54983

Karp, Larry S.; Perloff, Jeffrey M..

If a monopoly supplies a perishable good, such as tickets to a performance, and is unable to price discriminate within a period, the monopoly may benefit from the potential entry of resellers. If the monopoly attempts to intertemporally price discriminate, the equilibrium in the game among buyers is indeterminate when the resellers are not allowed to enter, and the monopoly's problem is not well defined. An arbitrarily small amount of heterogeneity of information among the buyers leads to a unique equilibrium. We show how the potential entry of resellers alters this equilibrium.

Mixed Tournaments, Common Shocks, and Disincentives: An Experimental Study

Palavras-chave: Intertemporal price discrimination; Scalpers; Coordination game; Common knowledge; Demand and Price Analysis; Industrial Organization; L12; D42; D45; D82.

Ano: 2003

URL: http://purl.umn.edu/25087

Wu, Steven Y.; Roe, Brian E.; Sporleder, Thomas L..

Two well-known hypotheses from the literature on tournaments are that (1) tournaments can filter out common shocks thereby reducing agents risk exposure; and (2) disincentive effects can arise when a tournament scheme is administered on a group of mixed ability agents. While handicapping and/or the creation of homogeneous groups have been suggested as mechanisms for mitigating disincentive effects, it is often impractical to use handicapping schemes and nearly impossible to create a completely homogeneous labor force. Hence, contract administrators who intend to use tournaments to elicit effort must be able to assess the positive effects of tournaments (eliminate common shocks) against the negative effects (disincentive effects). Using economic...

Looking Beyond the Incumbent: The Effects of Exposing Corruption on Electoral Outcomes

Palavras-chave: Mixed tournaments; Incentives; Relative performance contracts; Experimental economics; Research Methods/ Statistical Methods; C91 D01; D81; D82; D86.

Ano: 2007

URL: http://purl.umn.edu/9703

Chong, Alberto E.; De La O, Ana; Karlan, Dean S.; Wantchekon, Leonard.

Does information about rampant political corruption increase electoral participation and the support for challenger parties? Democratic theory assumes that offering more information to voters will enhance electoral accountability. However, if there is consistent evidence suggesting that voters punish corrupt incumbents, it is unclear whether this translates into increased support for challengers and higher political participation. We provide experimental evidence that information about copious corruption not only decreases incumbent support in local elections in Mexico, but also decreases voter turnout, challengers' votes, and erodes voters' identifcation with the party of the corrupt incumbent. Our results suggest that while flows of information are...

Tipo: Working Paper

Palavras-chave: Corruption; Accountability; Elections; Voting; Information; Institutional and Behavioral Economics; Political Economy; Public Economics; D72; D73; D82; D83.

Ano: 2012

URL: http://purl.umn.edu/121640

A Theory of Firm Decline

Gian Luca, Clementi; Cooley, Thomas; Di Giannatale, Sonia.

We study the problem of an investor that buys an equity stake in an entrepreneurial venture, under the assumption that the former cannot monitor the latter’s operations. The dynamics implied by the optimal incentive scheme is rich and quite different from that induced by other models of repeated moral hazard. In particular, our framework generates a rationale for firm decline. As young firms accumulate capital, the claims of both investor (outside equity) and entrepreneur (inside equity) increase. At some juncture, however, even as the latter keeps on growing, invested capital and firm value start declining and so does the value of outside equity. The reason is that incentive provision is costlier the wealthier the entrepreneur (the greater is inside...

Analysis of the Constraints to the Development of a Domestic Improved Seed Potato Industry in Mali

Palavras-chave: Principal Agent; Moral Hazard; Hidden Action; Incentives; Survival; Firm Dynamics; Financial Economics; D82; D86; D92; G32.

Ano: 2010

URL: http://purl.umn.edu/92788

Theory of Contracts and Agri-Environment Policies: A Budget Restriction Alters Standard Results of Mechanisms Design Theory

Diallo, Marthe.

This paper outlines proposed research, using concepts of New Institutional Economics, to identify the factors constraining the emergence of a market for domestically produced improved seed potatoes in Mali. It uses the Principal –Agent model to outline how to investigate the feasibility of developing a domestic seed potato industry in Mali by applying the concepts of efficient contract designs and other institutional arrangements. This research will contribute to the literature on: (a) contract and institutional design in the context of asymmetric information and uncertainty typical of agricultural markets in low-income countries and (b) design of improved seed production systems, particularly for clonal crops, in developing countries. The Malian potato...

Tipo: Thesis or Dissertation

Palavras-chave: Principal-agent model; Seed systems; Mali; Agricultural technology development; Input markets; Contracting; Potatoes; Food Security and Poverty; International Development; Research and Development/Tech Change/Emerging Technologies; D82; L14; Q13; Q16.

Ano: 2008

URL: http://purl.umn.edu/50351

Christensen, Jan.

Agri-environmental schemes are offered by a regulator to farmers. The farmer is to produce certain environmental goods and gets a pecuniary compensation for doing so. The problem of designing optimal schemes is dealt with using mechanisms design theory. This paper considers the situation where the regulator faces a budget constraint on total payments to farmers. It is shown, that 2 results of standard mechanisms design theory are affected when a budget restriction on total payments is present. 1) The "no distortion at the top rule" does not always hold. 2) It is not always optimal to offer heterogeneous farmers heterogeneous argi-environmental schemes.

A Principal-Agent Model for Investigating Traceability Systems Incentives on Food Safety

Palavras-chave: Agri-environmental schemes; Mechanisms design; Information Economics; Environmental Economics and Policy; Q28; D82.

Ano: 2002

URL: http://purl.umn.edu/24882

Resende Filho, Moises de Andrade.

This article investigates the effects of contingent payments and a traceability system's expected traceback rate of success on the food safety effort exerted by raw material suppliers. This sheds light on when contingent payments and the reliability of a traceability system are substitutes and complements to each other in terms of inducing raw material suppliers to exert higher food safety effort. In addition, the effect of higher penalties and costs of food safety crisis on the effort to be induced by buyers (principal) on suppliers (agents) is investigated under a symmetric information setting. Finally, the asymmetric information setting is formalized as a principal-agent model and left to be explored in a future work. Some numerical exercises are...

Quality Ambiguity and the Market Mechanism for Credence Goods

Palavras-chave: Information Asymmetry; Identity Preservation; Food Traceability; Supply Chain Management.; Food Consumption/Nutrition/Food Safety; D82; D86; C61.

Ano: 2007

URL: http://purl.umn.edu/7897

Benner, Dietrich.

With credence goods consumers cannot judge actual quality neither before purchase (ex ante) nor after purchase (ex post). Trust has to replace own examination and verification. Applying Choquet-Expected Utility theory, ageneral model of credence goods is developed wich takes the problem of trust explicitly in its view and generalizes the problem of quality uncertainty on the 'market for lemmons' of Akerlof (1970) to 'quality ambiguity' with credence goods. The model shows the market mechanism only performing well in providing credence goods when consumers' trust in given information is not too low. With trust too low, sellers of credence good will be driven out of the market by trust induced adverse selection. In market equilibrium prices will always be...

Grain price adjustment asymmetry: the case of cowpea in Ghana

Palavras-chave: Credence goods; Asymmetric information; Quality ambiguity; Quality uncertainty; Adverse selection; Ambiguity; Choquet expected utility; Agricultural and Food Policy; Marketing; C72; D81; D82.

Ano: 2004

URL: http://purl.umn.edu/98639

Langyintuo, Augustine S..

Patterns in price adjustment in response to information are important to market practitioners. This study looks at cowpea real wholesale price adjustment patterns in Bolgatanga, Wa, Makola and Techiman markets in Ghana. Using Techiman as the central market, a threshold autoregressive test for asymmetric price adjustment rejected the null hypothesis of symmetric adjustment for only the Bolgatanga-Techiman price series. An autoregressive conditional heteroskedastic regression indicates that wholesalers in Bolgatanga market respond differentially to price signals from Techiman than those in the other two markets. This suggests that policies targeting cowpea traders must recognize the differential responses by wholesalers to information.

Tipo: Journal Article

Palavras-chave: Africa; Ghana; Wholesalers; Market information; Autoregressive conditional heteroskedasticity; Threshold autoregressive; Crop Production/Industries; D82; D43.

Ano: 2010

URL: http://purl.umn.edu/96165

Intra-Household Resource Management Structure and Income-Hiding under Incomplete Information

Castilla, Carolina.

There is evidence that some multi-person households may withhold income transfers, such as bonuses, gifts, and cash transfers, from other members of the household (Ashraf (2009); Vogler and Pahl, (1994)). In this paper, I show that the incentives to hide income under incomplete information regarding the quantity of resources available to the household differ for three different household resource management structures. I illustrate this with a simple two-stage game. In the first stage, one spouse receives a monetary transfer that is unobserved by her spouse, and she must decide whether to reveal or to hide it. In the second stage, spouses bargain over the allocation of resources between a household good and private expenditure. The three models differ in...

Willingness-to-Pay for Calf Health Programs and Certification Agents

Palavras-chave: Incomplete information; Household bargaining; Resource management systems; Demand and Price Analysis; Labor and Human Capital; D13; D82; J12.

Ano: 2010

URL: http://purl.umn.edu/61607

Schumacher, Tucker; Schroeder, Ted C.; Tonsor, Glynn T..

Cattle feeders want feeder cattle that have been weaned and preconditioned with a certified health program. Preconditioned calves perform more efficiently in the feedlot with lower morbidity and mortality. Health program claims, however, range from no claim to being USDA-certified. The value of health protocol certification may vary with certifying entity. Results from a choice experiment and survey of cattle feeders indicate preconditioning programs that include weaning, vaccinating against respiratory and clostridial/blackleg, and treating for parasites are worth on average $7.28/cwt to feedlots. Furthermore, a health program certified by USDA carries an additional value of $2.37/cwt on average.

Tipo: Article

Palavras-chave: Calf health programs; Calf preconditioning; Value of certification; Marketing; Q13; L15; D82.

Ano: 2012

URL: http://purl.umn.edu/123777

Producer's choice of certification

Langinier, Corinne; Babcock, Bruce A..

Consumers are in general less informed than producers about the quality of agricultural goods. To reduce the information gap, consumers can rely on standards (labels, certifications, geographic indications) that insure quality and origin of the goods. However, these standards do not always fully reveal information. Some of them may just signal that the good is more likely to be of high quality. We investigate what kind of standards are most desirable for producers, and for society in general knowing that any system is costly to implement. One of our findings is that for intermediate values of certification costs, certification that fully reveals information makes high quality producers better off, but make the entire industry worse off. In this case, the...

Nonpoint Source Pollution Taxes and Excessive Tax Burden

Palavras-chave: Asymmetric information; Certification; Clubs; Quality.; Consumer/Household Economics; L11; L15; D82; D71.

Ano: 2005

URL: http://purl.umn.edu/19510

Karp, Larry S..

If a regulator is unable to measure firms' individual emissions, an ambient tax can be used to achieve the socially desired level of pollution. With this tax, each firm pays a unit tax on aggregate emissions. In order for the tax to be effective, firms must recognize that their decisions affect aggregate emissions. When firms behave strategically with respect to the tax-setting regulator, under plausible circumstances their tax burden is lower under an ambient tax, relative to the tax which charges firms on the basis of individual emissions. Firms may prefer the case where the regulator is unable to observe individual firm emissions, even if this asymmetric information causes the regulator to tax each firm on the basis of aggregate emissions.

Optimal Incentives Under Moral Hazard and Heterogeneous Agents: Evidence from Production Contracts Data

Palavras-chave: Ambient tax; Nonpoint source pollution; Moral hazard; Asymmetric information; Differential games; Environmental Economics and Policy; D82; H20; H40; Q20.

Ano: 1998

URL: http://purl.umn.edu/25100

Dubois, Pierre; Vukina, Tomislav.

In this paper we develop an analytical framework for the estimation of the structural model parameters of an incentive contract under moral hazard with heterogeneous agents. Using micro level data on swine production contract settlements, we confirm that contract farmers are heterogenous with respect to their risk aversion and that this heterogeneity affects the principal's allocation of production inputs across farmers. Assuming that contracts are optimal, we obtain estimates of a lower and an upper bound of agents' reservation utilities. We show that farmers with higher risk aversion have lower outside opportunities and hence lower reservation utilities.

A Model of Producer Incentives for Livestock Disease Management

Palavras-chave: Contracting; Heterogenous agents; Moral hazard; Livestock Production/Industries; Production Economics; D82; L24; Q12; K32; L51.

Ano: 2005

URL: http://purl.umn.edu/24645

Ranjan, Ram; Lubowski, Ruben N..

We examine the management of livestock diseases from the producers' perspective, incorporating information and incentive asymmetries between producers and regulators. Using a dynamic model, we examine responses to different policy options including indemnity payments, subsidies to report at-risk animals, monitoring, and regulatory approaches to decreasing infection risks when perverse incentives and multiple policies interact. This conceptual analysis illustrates the importance of designing efficient combinations of regulatory and incentive-based policies.

Consequences of Firms' Relational Financing in the Aftermath of the 1995 Mexican Banking Crisis

Palavras-chave: Livestock disease; Asymmetric information; Reporting; Indemnities; Risk management; Livestock Production/Industries; C61; D82; Q12; Q18; Q28.

Ano: 2004

URL: http://purl.umn.edu/15653