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

This paper addresses two issues pertaining to the market differentiation between non-genetically modified and genetically modified food varieties. First, a cost-efficiency explanation of the discrepancy between the observed shares of identity preserved non-genetically modified variety and the total supply of the variety is provided. Second, it is shown that when products can be falsely labeled as non-genetically modified, the share of false labeling depends on the level of identity preservation. Also in this context, it is demonstrated that the share of falsely labeled supply can increase in response to harsher fines.

Dynamic Informative Advertising of New Experience Goods

Palavras-chave: Agribusiness.

Ano: 2003

URL: http://purl.umn.edu/22182

This paper analyzes the optimal advertising and price policies of a monopolist who sells a new experience good over time to a population of heterogeneous forward-looking buyers. We consider informative advertising that can complement or substitute for learning-by-purchasing, and show that the advertising intensity always peaks during the early stages when the price extracts surplus from the buyers who are yet to learn their valuation for the good. We also show that even though informative advertising may temporarily raise prices and slow down the learning process, an advertising ban can reduce welfare.

Dynamic Informative Advertising of New Experience Goods

Palavras-chave: Monopoly; Advertising; Experience Goods; Learning; Private Information; Agribusiness; Agricultural and Food Policy; Demand and Price Analysis; Industrial Organization; Marketing.

Ano: 2011

URL: http://purl.umn.edu/103536

This paper analyzes the optimal informative advertising and price policies of a monopolist who sells a new experience good over time to a population of heterogeneous buyers. Under certain conditions, the advertising rate first increases and then decreases over the marketing cycle with a peak occurring at the end of the introductory period when prices are low. Advertising lowers introductory prices but also shortens the period during which they are offered. Advertising raises the share of consumers who know their valuation in the long-run but not necessarily in the short-run

Groundwater Use under Incomplete Information

Palavras-chave: Monopoly; Private Information; Consumer Learning; Informative Advertising; Consumer/Household Economics; Industrial Organization; Marketing.

Ano: 2010

URL: http://purl.umn.edu/61326

Saak, Alexander E.; Peterson, Jeffrey M..

In this paper, we introduce a game theoretic model of groundwater extraction in a two-cell aquifer under incomplete information. A novel assumption is that individual users have incomplete knowledge of the speed of lateral flows in the aquifer: although a user is aware that his neighbor's water use has some influence on their future water stock, they are uncertain about the degree of this impact. We find that the lack of information may either increase or decrease the rate of water use and welfare. In a two-period framework, the relevant characteristic is the ratio of the periodic marginal benefits of water use. Depending on whether this ratio is convex or concave, the average speed with which the aquifer is depleted decreases or increases when users...

SPATIAL PRODUCTION CONCENTRATION, DEMAND UNCERTAINTY, AND MULTIPLE MARKETS

Palavras-chave: Resource /Energy Economics and Policy.

Ano: 2006

URL: http://purl.umn.edu/21190

The geographic concentration of production of main field crops in several growing regions is a distinctive feature of U.S. agriculture. Among many possible reasons for spatial concentration, I study here the effects of the distribution of end users and terminal markets on acreage allocation. The presence of multiple terminal markets in a growing area may allow for a more flexible marketing plan, along with introducing more idiosyncratic demand uncertainty associated with each consumption point. To take better advantage of future marketing opportunities, growers, depending on their location relative to terminal markets, may adjust the crop mix produced on the farm. I characterize the types of environments that lead to a spatial production concentration of a...

FAIR VALUE OF WHOLE-FARM AND CROP-SPECIFIC REVENUE INSURANCE

Palavras-chave: Commodity prices; Location; Marketing; Production concentration; Supermodularity; Systematic risk; Industrial Organization.

Ano: 2003

URL: http://purl.umn.edu/18557

Hennessy, David A.; Saak, Alexander E.; Babcock, Bruce A..

The U.S. market in subsidized commodity revenue insurance contracts has expanded rapidly since 1996. By far the most prevalent contract forms are crop-specific, rather than the whole-farm design which has a better claim to being optimal. For an arbitrary acre allocation vector, this paper inquires into absolute and relative determinants of the actuarial costs of these forms. The actuarial value of whole-farm insurance increases under a particular characterization of >more systematic= risk, whereas the actuarial value of insurance through crop-specific contracts need not change. Upon fixing stochastic revenue interactions, we identify conditions such that the expected cost of revenue insurance via crop-specific contracts is increasing under a more...

IDENTITY PRESERVATION AND FALSE LABELING IN THE FOOD SUPPLY CHAIN

Palavras-chave: Risk and Uncertainty.

Ano: 2003

URL: http://purl.umn.edu/21988

The paper addresses two issues pertaining to the market differentiation between non-genetically modified (non-GM) and genetically modified (GM) food varieties. First, a cost-efficiency explanation is given for the discrepancy between the observed shares of identity preserved non-GM variety and the total supply of the variety. Second, the analysis shows that when products can be falsely labeled as non-GM, the share of false labeling depends on the level of identity preservation. In this context, the analysis demonstrates that the share of falsely labeled supply can increase in response to harsher fines.

Groundwater Use in Asymmetric Aquifer under Incomplete Information

Palavras-chave: Food Consumption/Nutrition/Food Safety.

Ano: 2002

URL: http://purl.umn.edu/18614

This paper analyzes a game theoretic model of groundwater extraction in an asymmetric two-cell aquifer under incomplete information about the extent to which the local stock of groundwater depends on the extraction histories at nearby wells. A novel assumption is that the elevation of the bottom of the aquifer differs across, otherwise identical, cells. Asymmetry creates a strategic advantage (disadvantage) for the user in the deep (shallow) cell in “stealing” neighbor’s water. The user with a larger initial stock actually benefits from the commonality of groundwater provided that the asymmetry is not too small or too great. Assuming that the asymmetry between users is sufficiently large, better informed, non-cooperative users attain a higher joint...

A Model of Labeling with Horizontal Differentiation and Cost Variability

Palavras-chave: Common property resource; Asymmetry; Groundwater; Information; Resource /Energy Economics and Policy.

Ano: 2008

URL: http://purl.umn.edu/6545

We study optimal disclosure of variety by a multi-product firm with random costs. In our model there are two varieties that are horizontally differentiated and differ in overall quality, but buyers cannot distinguish between them without labels. The equilibrium prices for labeled varieties are increasing functions of the absolute value of the cost differential and do not reveal which variety is cheaper to produce. Nondisclosure is most common when there is moderate uncertainty about the relative input cost, not too much idiosyncrasy in consumer valuations, and not too much difference in quality across varieties. Although mandatory disclosure of variety benefits consumers, it decreases expected welfare when relative input cost variability is large and...

EQUILIBRIUM AND EFFICIENT LAND-USE ARRANGEMENTS UNDER SPATIAL EXTERNALITY ON A LATTICE

Palavras-chave: Agribusiness; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; Industrial Organization; Marketing; Information; Labeling; Quality disclosure; Product differentiation.

Ano: 2011

URL: http://purl.umn.edu/103540

Many cases of externalities in agricultural production, such as pesticide drift, cross-pollination, and offensive odors, are attributable to the incompatibility of neighboring land uses and exhibit distance dependence. We characterize equilibrium spatial patterns of externality-generating and -receiving land uses on a two-dimensional lattice with noncooperative, profit-maximizing producers. In equilibrium, generators or recipients form one or more neighborhoods with certain geometric properties, depending on how an externality dissipates with distance and whether there is an externality generated outside the region's boundaries. Efficient land-use arrangements maximize social welfare subject to the implementability constraints stipulating that no...

LOCATION AND MARKETING UNDER MARKETING ASSISTANCE LOAN AND LOAN DEFICIENCY PAYMENT PROGRAMS

Palavras-chave: Graph partitioning; Land-use arrangement; Spatial externality; Supermodular game; Land Economics/Use.

Ano: 2004

URL: http://purl.umn.edu/18501

Marketing assistance loan (MAL) and loan deficiency payment (LDP) programs differ in their treatment of basis. This paper analyzes marketing decisions under these programs when producers are differentiated by location with respect to the terminal market. The developed model may help explain the observed lack of an association between the county loan rate and the share of a county's production enrolled in MAL programs. Under certain conditions, multiple equilibria are shown to emerge. The effects of MAL and LDP programs on welfare and policy implications are discussed.

LOCATION, PLANTING DECISIONS, AND THE MARKETING OF QUALITY-DIFFERENTIATED AGRICULTURAL COMMODITIES

Palavras-chave: Marketing.

Ano: 2002

URL: http://purl.umn.edu/18464

In a marketing environment, the demand conditions, the costs of shipping and storing grain varieties, the interest rate on farm loans, and the distribution of cropland in the area are important determinants of growers' planting decisions. In this article, I focus on a market for two quality-differentiated agricultural commodities: one produced with the use of biotechnology and the other, without. I develop a model for analyzing the equilibrium planting and marketing decisions made by geographically dispersed producers during the marketing year following harvest. I identify the types of marketing environments leading to a greater concentration of equilibrium acreage planted to a particular grain variety near the market and investigate the effects of the...

State-Contingent Demand for Herbicide-Tolerance Seed Trait

Palavras-chave: Commodity prices; Grain storage; Location; Marketing; Product quality; Supermodularity; Crop Production/Industries.

Ano: 2003

URL: http://purl.umn.edu/18427

Hennessy, David A.; Saak, Alexander E..

Suppose a farmer had to apply a herbicide pre-emergence or not at all. The advent of a herbicide-tolerance trait innovation then provides the option to wait for more information before making a state-contingent post-emergence application. This option to wait can increase or decrease average herbicide use. For heterogeneous acre types, trait royalties increase with the level of uncertainty about the extent of weed damage. Royalties are largest when acre infestation susceptibility types are bunched around the type indifferent to applying the herbicide in the absence of the trait. The trait complements (substitutes for) information technologies that facilitate informed post-emergence (pre-emergence) decisions.

Tipo: Journal Article

Palavras-chave: Genetics; Information inputs; Patent value; Post-emergence; Real option; Crop Production/Industries.

Ano: 2003

URL: http://purl.umn.edu/30723

SPATIAL ARRANGEMENTS OF EXTERNALITY GENERATING AND RECEIVING ACTIVITIES

Many cases of externalities in agricultural production such as pesticide drift, cross-pollination, and offensive odors are attributable to the incompatibility of neighboring land uses. This paper offers an examination of when an efficient activity arrangement is compatible with free-market incentives. Also, free-market and socially efficient activity arrangements are characterized in terms of spatial concentration of the externality generating uses.

LOCATION, LAND QUALITY, AND RENTAL VOLATILITY

Palavras-chave: Externality; Graph partitioning; Land-use arrangement; Spatial concentration; Resource /Energy Economics and Policy.

Ano: 2003

URL: http://purl.umn.edu/18525

Saak, Alexander E.; Hennessy, David A..

It appears to be widely believed that returns on low quality land are more variable than on high quality land. Using Ricardian rent as the measure of returns and sensitivity to output price as the measure of volatility, we investigate this null hypothesis for three different measures of quality. These are proximity to market, output productivity, and cost efficiency. In all cases, we identify precise conditions on the production technology such that rental volatility varies in a monotone manner with land quality. A method of econometric investigation of the relationship between rental volatility and land quality is developed and applied to Iowa cash rents data collected during 1994-2000. Our preliminary findings provide partial empirical support for...

SPATIAL PRODUCTION CONCENTRATION UNDER YIELD RISK AND RISK AVERSION

Palavras-chave: Land Economics/Use.

Ano: 2001

URL: http://purl.umn.edu/20747

A study of equilibrium acreage allocation decisions at the farm and regional levels under risk aversion, yield uncertainty, and endogenous crop prices is undertaken in a two-crop, two-region setting. The main insight is that a partial specialization in one crop at a regional level may be an equilibrium dominant strategy relative to the more diversified crop mix produced on farm. This is due to the trade-offs among the effects of the "natural hedge" based on the negative price-yield correlation on the probability distributions of crop revenues and whole-farm revenue risk reduction through crop enterprise diversification. Another finding is that equilibrium in which each region grows only one crop is unlikely unless there are comparative advantages in...

Groundwater Pumping by Heterogeneous Users

Palavras-chave: Land allocation; Spatial yield dependence; Supermodular order; Industrial Organization.

Ano: 2004

URL: http://purl.umn.edu/18488

Saak, Alexander E.; Peterson, Jeffrey M..

Farm size is a significant determinant of both groundwater irrigated farm acreage and groundwater irrigation application rates per acre. This paper analyzes the patterns of groundwater exploitation when resource users in the area overlying a common aquifer are heterogeneous. In the presence of user heterogeneity, the common resource problem consists of inefficient dynamic and spatial allocation of groundwater because it impacts income distribution not only across periods but also across farmers. Under competitive allocation, smaller farmers pump groundwater faster if farmers have a constant marginal periodic utility of income. However, it is possible that larger farmers pump faster if the Arrow-Pratt coefficient of relative risk-aversion is sufficiently...