Modelling of Agricultural Behavior under the CAP Regime: Policy Effectiveness and Design
AbstractThe paper discusses the design of optimal regulatory policies under an alternative analytical framework of unbounded and bounded rationality, by considering the mechanism that provides the type of the optimal CAP instruments that ensure the collective attainment of a social environmental target, along with the type of interdependence characterizing them. The problem of the optimal regulation of an unboundedly rational population of farmers is discussed in both a static and a dynamic context. The long-run viability of the Agenda 2000 CAP reform is also examined under the assumption of bounded rationality by employing the evolutionary framework of replicator dynamics. Analysis indicated that.it may be socially desirable on environmental grounds not only to maintain coupled payments but also to impose on farmers a set of charges on the various aspects of farming activity.
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Bibliographic InfoPaper provided by University of Crete, Department of Economics in its series Working Papers with number 0819.
Length: 26 pages
Date of creation: 10 Dec 2007
Date of revision: 01 Jul 2008
production subsidy; direct payment; cross-compliance principle; optimal regulation; unbounded rationality; bounded rationality; replicator dynamics.;
Find related papers by JEL classification:
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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