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Producer Decision Making under Uncertainty: Role of Past Experiences and Question Framing

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  • Glynn T Tonsor

Abstract

Limited research examines the role of reference points or how uncertain outcomes are processed in producer decisions. This study employs a survey containing a split-sample choice experiment varying how uncertain outcomes are portrayed, and assesses multiple candidate reference points. Results suggest that U.S. cattle producers use the best outcome experienced as reference points in their decisions, and the method by which uncertain outcomes are presented impacts loss aversion, marginal willingness to pay, and market participation estimates. This illustrates how research employing split samples, multiple reference points, and alternative methods of portraying uncertain outcomes may better identify producer decision-making.

Suggested Citation

  • Glynn T Tonsor, 2018. "Producer Decision Making under Uncertainty: Role of Past Experiences and Question Framing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(4), pages 1120-1135.
    • Handle: RePEc:oup:ajagec:v:100:y:2018:i:4:p:1120-1135.
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    File URL: http://hdl.handle.net/10.1093/ajae/aay034
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    Citations

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    Cited by:

    1. Vincenzina Caputo & Jayson L Lusk & Rodolfo M Nayga, 2020. "Am I Getting a Good Deal? Reference‐DependentDecision Making When the Reference Price Is Uncertain," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 132-153, January.
    2. Zhanwen Shi & Erbao Cao, 2020. "Contract farming problems and games under yield uncertainty," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1210-1238, October.
    3. Robert Huber & Hang Xiong & Kevin Keller & Robert Finger, 2022. "Bridging behavioural factors and standard bio‐economic modelling in an agent‐based modelling framework," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(1), pages 35-63, February.
    4. Zhao, Shuoli & Skevas, Teo & Chai, Yuan & Tack, Jesse B., 2020. "Crop Insurance Decision under Expected Revenue," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304574, Agricultural and Applied Economics Association.
    5. McKendree, Melissa G.S. & Tonsor, Glynn T. & Schulz, Lee L., 2021. "Management of Multiple Sources of Risk in Livestock Production," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 53(1), pages 75-93, February.
    6. Kar Ho Lim & Wuyang Hu, 2023. "Contextual reference price in choice experiments," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(4), pages 1288-1306, August.
    7. Marc F. Bellemare & Yu Na Lee & David R. Just, 2020. "Producer Attitudes Toward Output Price Risk: Experimental Evidence from the Lab and from the Field," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 806-825, May.
    8. Shuoli Zhao & Chengyan Yue, 2020. "Risk preferences of commodity crop producers and specialty crop producers: An application of prospect theory," Agricultural Economics, International Association of Agricultural Economists, vol. 51(3), pages 359-372, May.
    9. Zhanwen Shi & Erbao Cao, 2021. "Risk pooling cooperative games in contract farming," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(1), pages 117-139, March.
    10. Joshua Huang & Teresa Serra & Philip Garcia, 2021. "The Value of USDA Announcements in the Electronically Traded Corn Futures Market: A Modified Sufficient Test with Risk Adjustments," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 712-734, September.

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