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The Role of Bounded Rationality in Farm Financing Decisions – First Empirical Evidence – AgEcon
Musshoff, Oliver; Hirschauer, Norbert; Wassmuss, Harm.
Farmers do not often change from their house bank to another bank, even if the competing banks offer better conditions. This “reluctance to switch” can be explained, on the one hand, by the transaction costs resulting from such a change of business relation. On the other hand, it may be the result of bounded rationality. The results of a survey of North German farmers show that they are indeed bounded rational borrowers. They greatly underestimate the monetary disadvantages which are caused by the higher interest rates for loans from their house bank. In other words: They do not switch bank even if their individually perceived transaction costs are already “covered” by the lower interest rates of the alternative loan offer.
Tipo: Conference Paper or Presentation Palavras-chave: Financing behavior; Bounded rationality; Switching costs; Agricultural Finance; Farm Management; Financial Economics; Institutional and Behavioral Economics; Q12; G32; C91.
Ano: 2009 URL: http://purl.umn.edu/51545
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International Harmonization and the Gains from Trade AgEcon
Kerr, William A..
International harmonization of standards and regulations is often a goal expressed in trade agreements because it is expected to yield gains from trade. Absence of progress toward harmonization is often interpreted as being motivated by protectionism, with differences in standards and regulations seen as non-tariff barriers. While protectionism may well be the source of resistance to harmonization, there may be other reasons it is not pursued. These alternative explanations have not received much attention from economists. In this article some of these alternatives are outlined - demand effects from altering standards, switching costs, proprietary technologies. The article concludes that proposals for international harmonization need to be scrutinized...
Tipo: Journal Article Palavras-chave: Demand effects; Harmonization; Regulation; Standards; Switching costs; TBT; International Relations/Trade.
Ano: 2006 URL: http://purl.umn.edu/23843
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