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Experimental Simulation Of Public Information Impacts On Price Discovery And Marketing Efficiency In The Fed Cattle Market

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Author Info

  • Anderson, John D.
  • Ward, Clement E.
  • Koontz, Stephen R.
  • Peel, Derrell S.
  • Trapp, James N.

Abstract

Federal budgetary pressures raise questions regarding the importance of public market information. This study assesses the impact of price discovery and production efficiency of reducing public price and quantity information. The amount and type of information provided to Fed Cattle Market Simulator (FCMS) participants was varied by periodically withholding current and weekly summary information according to a predetermined experimental design. Results show that reducing information increased price variance and decreased marketing efficiency; that is, more cattle were delivered at weights deviating from 1,150 pounds- the least-cost marketing weight in the simulator. These factors, which increase costs, make the industry less competitive.

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File URL: http://purl.umn.edu/31170
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Bibliographic Info

Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 23 (1998)
Issue (Month): 01 (July)
Pages:

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Handle: RePEc:ags:jlaare:31170

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Web page: http://waeaonline.org/
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Related research

Keywords: Demand and Price Analysis; Marketing;

References

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  1. Jones, Rodney D. & Schroeder, Ted C. & Mintert, James R. & Brazle, Frank, 1992. "The Impacts Of Quality On Cash Fed Cattle Prices," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(02), December.
  2. Rausser, Gordon C. & Perloff, Jeffrey M & Zusman, Pinhas, 1985. "The food marketing system: the relevance of economic efficiency measures," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7361f847, Department of Agricultural & Resource Economics, UC Berkeley.
  3. repec:cdl:agrebk:666489 is not listed on IDEAS
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Citations

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Cited by:
  1. Fausti, Scott W. & Diersen, Matthew A. & Qasmi, Bashir A., 2007. "Public Price Reporting in the Cash Market for Live Cattle: A Spatial Market Approach," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 36(2), October.
  2. Jared G. Carlberg & Robert J. Hogan & Clement E. Ward, 2009. "Game theory application to Fed Cattle procurement in an experimental market," Agribusiness, John Wiley & Sons, Ltd., vol. 25(1), pages 56-69.
  3. Fausti, Scott & Diersen, Matthew, 2005. "Price Transparency in the Voluntary Price Reporting System for Live Cattle: Theory and Empirical Evidence from South Dakota," Staff Papers 050001, South Dakota State University, Department of Economics.
  4. Fausti, Scott W. & Keimig, R. & Diersen, Matthew A. & Kim, Han & Santos, Joseph M., 2003. "Mandatory Versus Voluntary Price Reporting: An Empirical Investigation Of The Market Transparency Controversy," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35139, Southern Agricultural Economics Association.
  5. Fausti, Scott W. & Diersen, Matthew A., 2004. "The Voluntary Reporting System's Ability to Provide Price Transparency in the Cash Market for Dressed Steers: Evidence from South Dakota," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(03), December.
  6. Carlberg, Jared G. & Ward, Clement E., 2001. "A Partial-Adjustment, Mixed Linear Model Of Price Discovery In An Experimental Market For Fed Cattle," 2001 Annual meeting, August 5-8, Chicago, IL 20598, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Koontz, Stephen R., 2012. "Impacts of "Right of First Refusal" on Competitiveness of Fed Cattle Markets: Results from an Economic Experiment," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123875, Agricultural and Applied Economics Association.
  8. Nicols, Panos & Ahmadi-Esfahani, Fredoun Z., 2009. "Are Australian wholesale vegetable markets LOOPy?," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47618, Australian Agricultural and Resource Economics Society.
  9. Schroeder, Ted C. & Ward, Clement E., 2000. "Price Discovery Issues And Trends In Cattle And Hog Markets," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36418, Western Agricultural Economics Association.
  10. Ward, Clement E. & Koontz, Stephen R. & Peel, Derrell S. & Trapp, James N., 2001. "Lessons Learned From Research With The Fed Cattle Market Simulator," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36181, Western Agricultural Economics Association.
  11. Anderson, John D. & Hudson, Darren & Harri, Ardian & Turner, Steven C., 2007. "A New Taxonomy of Thin Markets," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34826, Southern Agricultural Economics Association.
  12. Wilson, William W. & Dahl, Bruce L. & Johnson, D. Demcey, 1999. "Transparency And Bidding Competition In International Wheat Trade," Agricultural Economics Reports 23403, North Dakota State University, Department of Agribusiness and Applied Economics.
  13. Fausti, Scott W. & Diersen, Matthew A., 2003. "Did The Voluntary Price Reporting System Fail To Provide Price Transparency In The Cash Market For Dressed Steers: Evidence From South Dakota," 2003 Annual Meeting, July 13-16, 2003, Denver, Colorado 35971, Western Agricultural Economics Association.
  14. Clement E. Ward & Jong-In Lee, 2002. "Impacts from meatpacking firm mergers in an experimental market," Agribusiness, John Wiley & Sons, Ltd., vol. 18(2), pages 247-260.
  15. Lyford, Conrad P. & Hicks, R. Todd & Ward, Clement E. & Trapp, James N. & Peel, Derrell S., 2001. "The Effect Of Contracting On Pricing Dynamics In The Fed Cattle Market: An Experimental Simulation Approach," 2001 Annual meeting, August 5-8, Chicago, IL 20535, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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