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

Sgobbi, Alessandra; Carraro, Carlo.

The objective of this paper is to investigate the usefulness of non-cooperative bargaining theory for the analysis of negotiations on water allocation and management. We explore the impacts of different economic incentives, a stochastic environment and varying individual preferences on players strategies and equilibrium outcomes through numerical simulations of a multilateral, multiple issues, non-cooperative bargaining model of water allocation in the Piave River Basin, in the North East of Italy. Players negotiate in an alternating-offer manner over the sharing of water resources (quantity and quality). Exogenous uncertainty over the size of the negotiated amount of water is introduced to capture the fact that water availability is not known with...

What's the Rate? Disentangling the Weitzman and the Gollier Effect

Palavras-chave: Bargaining; Non-Cooperative Game Theory; Simulation Models; Uncertainty; Environmental Economics and Policy; C61; C71; C78.

Ano: 2007

URL: http://purl.umn.edu/7446

Discounting and confidence

Traeger, Christian P..

The uncertainty of future economic development affects the term structure of discount rates and, thus, the intertemporal weights that are to be used in cost benefit analysis. The U.K. and France have recently adopted a falling term structure to incorporate uncertainty and the U.S. is considering a similar step. A series of publications discusses the following concern: A seemingly analogous argument used to justify falling discount rates can also be used to justify increasing discount rates. We show that increasing and decreasing discount rates mean different things, can coexist, are created by different channels through which risk affects evaluation, and have the same qualitative effect of making long-term payoffs more attractive.

Tipo: Working Paper

Palavras-chave: Benefit cost analysis; Discounting; Term structure; Uncertainty; Weitzman-Gollier puzzle; Environmental Economics and Policy; Public Economics; D61; D81; H43; Q54.

Ano: 2012

URL: http://purl.umn.edu/121932

Uncertainty in Integrated Assessment Models of Climate Change: Alternative Analytical Approaches

Traeger, Christian P..

Revision of CUDARE Working Paper 1117 issued June 2011

Tipo: Working Paper

Palavras-chave: Uncertainty; Discounting; Climate change; Ambiguity; Confidence; Subjective beliefs; Prudence; Pessimism; Expected utility; Intertemporal substitutability; Intertemporal risk aversion; Risk and Uncertainty; D61; Q54; D81; D90.

Ano: 2011

URL: http://purl.umn.edu/120418

Golub, Alexander; Narita, Daiju; Schmidt, Matthias G.W..

Uncertainty plays a key role in the economics of climate change, and the discussions surrounding its implications for climate policy are far from settled. We give an overview of the literature on uncertainty in integrated assessment models of climate change and identify some future research needs. In the paper, we pay particular attention to three different and complementary approaches that model uncertainty in association with integrated assessment models: the discrete uncertainty modeling, the most common way to incorporate uncertainty in complex climate-economy models: the real options analysis, a simplified way to identify and value flexibility: the continuous-time stochastic dynamic programming, which is computationally most challenging but necessary...

Captive insurance companies and the management of non-conventional corporate risks

Palavras-chave: Uncertainty; Learning; Economics of Climate Change; Integrated Assessment Models; Real Options; Environmental Economics and Policy; D81; Q54; C61.

Ano: 2011

URL: http://purl.umn.edu/99638

Lesourd, Jean-Baptiste; Schilizzi, Steven.

We examine under what conditions setting up a captive insurance company with reinsurance is an optimal solution for risk-averse firms when the insured firm, the insurer and the reinsurer do not know the probability distribution of some risks, and have conflicting estimates of this distribution.

Trust as a Determinant of Consumer Behaviour in Food Safety Crises

Palavras-chave: Corporate insurance; Reinsurance; Uncertainty; Ambiguity; Non-conventional risks; Captive insurance companies; Risk and Uncertainty; D81; G22; Q2.

Ano: 2011

URL: http://purl.umn.edu/100886

Dierks, Leef H.; Hanf, C.-Hennig.

Based on an enhancement of Ajzen's Theory of Planned Behaviour, this article investigates German consumers' trust in different sources of information. Moreover, it discusses the settings and the extent to which consumers' trust influences consumers' behaviour both in the case of a standard purchasing situation and in the environment of a hypothetical food safety incidence such as bird flu . Results indicate that both the consumers' attitude and their trust in suppliers of information is a crucial factor determining their behaviour under uncertainty.

Should we impose emissions taxes that firms evade?

Palavras-chave: Consumer behaviour; Uncertainty; Trust; Food safety; Food Consumption/Nutrition/Food Safety.

Ano: 2006

URL: http://purl.umn.edu/25452

Stranlund, John K..

Most of the theoretical literature on enforcing environmental policies focuses on situations in which pollution sources are noncompliant. However, some recent work suggests that these situations will very often involve suboptimal policy designs. Thus, the circumstances under which it is efficient to implement policies that do not motivate full compliance appear to be more limited than most of the literature would imply. In this paper, I identify several circumstances under which regulators may conserve enforcement costs by implementing emissions taxes that firms evade. I demonstrate that a regulator can use a firm’s tax evasion to reduce monitoring effort, but only if its monitoring strategy can be made an increasing function of the firm’s emissions, if...

Optimal Preservation of Agricultural and Environmental Land within a Municipality Under Irreversibility and Uncertainty

Palavras-chave: Compliance; Enforcement; Emissions Taxes; Monitoring; Sanctions; Uncertainty; Environmental Economics and Policy; Public Economics; L51; Q58.

Ano: 2010

URL: http://purl.umn.edu/93967

Howard, Peter H..

Replaced with revised version of paper 07/22/11.

Examining the Functional Specification of Two-Parameter Model under Location and Scale Parameter Condition

Palavras-chave: Uncertainty; Irreversibility; Spatial-temporal modeling; Value of information; Policy design; Climate change; Agricultural preservation; Environmental conservation; Environmental Economics and Policy; Land Economics/Use; Political Economy; Risk and Uncertainty.

Ano: 2011

URL: http://purl.umn.edu/103639

Nakashima, Takahiro.

The functional specification of mean-standard deviation approach is examined under location and scale parameter condition. Firstly, the full set of restrictions imposed on the mean-standard deviation function under the location and scale parameter condition are made clear. Secondly, the examination based on the restrictions mentioned in the previous sentence derives the new properties of the mean-standard deviation function on the applicability of additive separability and the curvature of expansion path which links the points that give the same slope of indifference curve. It reveals that attention has not been sufficiently paid to the restrictions in interpreting the linear mean-standard deviation model and the nonlinear mean-standard deviation model...

Economic Returns to Entrepreneurial Behavior

Palavras-chave: Mean-standard deviation approach; Location and scale parameter condition; Functional specification; Risk aversion; Uncertainty; Research Methods/ Statistical Methods.

Ano: 2006

URL: http://purl.umn.edu/21171

Ross, R. Brent; Westgren, Randall E..

Highly turbulent environments require firms to act entrepreneurially. The returns to entrepreneurial activities are known as entrepreneurial rents. Following the payments perspective, these rents are allocated to the entrepreneurial resources of the firm as factor payments. However, unlike other factor payments, little is known about how to value these types of rents. An analysis of the economics and management literature reveals that entrepreneurial rents are a return to alertness, subjective judgment, asset control, and uncertainty bearing. Furthermore, entrepreneurial rents are noncontractible and temporary. This paper introduces two complementary valuation models that capture these characteristics and that explicitly impute value to various...

Tipo: Journal Article

Palavras-chave: Entrepreneurship; Factor payments; Subjective judgment; Uncertainty; Agribusiness; Risk and Uncertainty; M13; B12; B25; P23; Q13.

Ano: 2006

URL: http://purl.umn.edu/43776

Modelling the Impact of the CAP Reform on Farm Investments

Sckokai, Paolo; Moro, Daniele.

In this paper we evaluate empirically the impact of policies on farm investment and output decisions, considering risk-averse farmers making inter-temporal choices on current and future profits. We refer specifically to the recent reform of the CAP, while estimation and simulation results are carried out on a FADN sample of Italian arable crop farms. The main message of the paper is that a policy change that shifts resources from price support to direct payments tend to consistently reduce farm investments, mainly as a result of the increased output price volatility, which increases the level of uncertainty faced by farmers. However, this is not clearly reflected in a negative impact on farm output.

Scope and Sustainability of Cooperation in Transboundary Water Sharing of the Volta River

Palavras-chave: Investments; Common Agricultural Policy; Decoupling; Uncertainty; Agricultural and Food Policy; Q18.

Ano: 2005

URL: http://purl.umn.edu/24468

Bhaduri, Anik; Perez, Nicostrato D.; Liebe, Jens.

The paper explores the scope and sustainability of a self-enforcing cooperative agreement in the framework of a game theoretic model, where the upstream and downstream country, Burkina Faso and Ghana respectively in the Volta River Basin, bargain over the level of water abstraction in the upstream. In the model we consider the case where the downstream country, Ghana, offers a discounted price for energy export to the upstream country, Burkina Faso, to restrict its water abstraction rate in the upstream. The paper examines the benefits and sustainability of such self-enforcing cooperative arrangements between Ghana and Burkina Faso given stochastic uncertainty in the river flow. The findings of the paper suggest that at the present condition, the marginal...

Wie viel bringt eine verbesserte Produktionsprogrammplanung auf der Grundlage einer systematischen Auswertung empirischer Zeitreihen? – Die Bedeutung von Prognosemodellen bei der Optimierung unter Unsicherheit

Palavras-chave: Bargaining; Cooperation; Transboundary; Uncertainty; Volta River Basin; Demand and Price Analysis; Environmental Economics and Policy; Risk and Uncertainty.

Ano: 2008

URL: http://purl.umn.edu/43324

Musshoff, Oliver; Hirschauer, Norbert.

In this paper we examine whether there is room for improvement in farm program decisions through the integration of formal mathematical optimisation into the planning process. Probing the potential for improvement, we investigate the cases of four Brandenburg cash crop farms over the last six years. We find that their total gross margins could have been increased significantly through a more sophisticated program planning. However, we also find that the superiority of formalised planning approaches depends on the quality of the data. The superior formal planning approach includes, in contrast to farmers’ ad hoc planning, a systematic time series analysis of gross margins and a stochastic optimisation model. For each of the six years, the formal planning...

Tipo: Journal Article

Palavras-chave: Planning of the production program; Optimisation; Uncertainty; Static distributions; Stochastic processes; Farm Management; Risk and Uncertainty.

Ano: 2006

URL: http://purl.umn.edu/97196

EXCEL COOPERATIVE: STRATEGIC RESPONSE TO THE BOOM IN BIOFUELS. TEACHING NOTE

Roucan-Kane, Maud; Boehlje, Michael; Gray, Allan W.; Akridge, Jay T..

The objective of this paper is to present the teaching note of a case study. The case study outlines the strategic issues facing Excel Cooperative as a result of the rapid expansion of biofuel production capacity in the Midwestern U.S. Excel Cooperative is a mid-sized, ‘local’, farmer-owned cooperative serving farmers in north central Indiana. Excel is composed of four divisions: agronomy, energy, grain, and feed/livestock. With the Excel case, the reader must think strategically about the broad impacts of the biofuel “boom”, apply strategic management tools and decision-making under uncertainty concepts to better understand the impacts, and frame a response. The methodology proposed in the teaching note is composed of a SWOT analysis, scorecarding and...

Risk in Public Policy Making: A Neglected Issue in Australia

Palavras-chave: Uncertainty; Risk; Heat mapping; Scorecarding; Scenario analysis; Payoff matrix; Decision tree; Real option; Traps; Agribusiness; D81.

Ano: 2009

URL: http://purl.umn.edu/53584

Hardaker, J. Brian; Fleming, Euan M.; Lien, Gudbrand D..

We argue for greater recognition of the risky nature of most policy decisions. In this context we discuss the gulf between public risk perceptions and attitudes and those of 'experts'. Public views of risk are often inconsistent and seemingly irrational. They nevertheless influence policy choices in a democracy. On the other hand, experts often claim unjustifiable levels of confidence in their predictions of policy choice outcomes, creating a lack of public faith in their recommendations. While risky policy choices deserve more systematic decision analysis, there is a need for more effective interaction between policy makers, decision analysts and the public.

Some Estimates of Farmers' Utility Functions

Palavras-chave: Policy-making; Risk; Uncertainty; Decision Analysis; Perceptions; Subjectivity; Institutional and Behavioral Economics; Political Economy; Risk and Uncertainty.

Ano: 2008

URL: http://purl.umn.edu/5997

Hildreth, Clifford; Knowles, Glenn J..

Utility functions for 13 Minnesota farmers are estimated from their responses to hypothetical decision problems under uncertainty. The results furnish strong evidence of risk aversion and of decreasing absolute risk aversion as wealth increases.

Tipo: Report

Palavras-chave: Utility; Bayesian; Farmers; Uncertainty; Risk aversion; Decision theory; Cattle; Risk and Uncertainty.

Ano: 1982

URL: http://purl.umn.edu/54545

A Nonlinear Offset Program to Reduce Nitrous Oxide Emissions Induced by Excessive Nitrogen Application

Rosas, Francisco; Babcock, Bruce A.; Hayes, Dermot J..

On average, U.S. farmers choose to apply nitrogen fertilizer at a rate that exceeds the ex post agronomically optimal rate. The technology underlying the yield response to nitrogen rewards producers who over apply in years when rainfall is excessive. The overapplication of nutrients has negative environmental consequences because the nitrogen that is not taken up by the plant will typically volatilize causing N2O emissions, or leach causing water pollution. We present a nonlinear offset program that induces farmers to reduce their nitrogen applications to the level that will be consumed by the plant in a typical year and, as a result, reduce N2O emissions from agriculture. The offset program is nonlinear because of the nonlinear relationship between N2O...

IDENTITY PRESERVATION AND LABELING OF GENETICALLY MODIFIED PRODUCTS: SYSTEM DESIGN AND ENFORCEMENT ISSUES

Palavras-chave: Carbon offsets; Nitrogen fertilizer; Nitrous oxide; Pollution; Uncertainty; Crop Production/Industries; Environmental Economics and Policy; Production Economics; Risk and Uncertainty.

Ano: 2011

URL: http://purl.umn.edu/103914

Moschini, GianCarlo; Lapan, Harvey E..

This paper analyzes economic issues that arise in devising a credible and enforceable system of identity preservation and labeling for genetically modified (GM) and non-GM products. The model represents three stages in the supply chain: farm production, marketing handlers, and final users. The possibility of accidental co-mingling of non-GM products is modeled at the marketing stage. Regulation takes the form of a threshold level of purity for non-GM products, a probability of government testing to verify compliance with the threshold level, and a fine for violators. Uncertainty is modeled explicitly, such that would-be suppliers of non-GM products always face some risk of failing the test and incurring a fine. The paper also presents a novel demand...

The state-contingent approach to production under uncertainty

Palavras-chave: Biotechnology; Enforcement; Food labeling; Identity preservation; Regulation; Uncertainty; Research and Development/Tech Change/Emerging Technologies.

Ano: 2004

URL: http://purl.umn.edu/18355

Quiggin, John C.; Chambers, Robert G..

The central claim of this paper is that the state-contingent approach provides the best way to think about all problems in the economics of uncertainty, including problems of consumer choice, the theory of the firm, and principal–agent relationships. This claim is illustrated by recent developments in, and applications of, the state-contingent approach.

Tipo: Journal Article

Palavras-chave: Risk; State-contingent production; Uncertainty; Risk and Uncertainty.

Ano: 2006

URL: http://purl.umn.edu/116925

Improved Program Planning Approaches Generates Large Benefits in High Risk Crop Farming

Musshoff, Oliver; Hirschauer, Norbert.

This paper examines whether there is room for the improvement of farm program decisions through the incorporation of mathematical optimization in the practical planning process. Probing the potential for improvement, we investigate the cases of four German cash crop farms over the last six years. The formal planning approach includes a systematic time series analysis of farmspecific single gross margins and a stochastic optimization model. In order to avoid solutions that simply exceed the farmer's risk tolerance, the apparently accepted variance of the observed program's total gross margin which represents an observable reflection of the individual farmer's risk attitude is used as an upper bound in the optimization. For each of the 24 planning...