Influence of strategies and heuristics on farmers' response to change under uncertainty

Hierarchical Decision Models of woolproducers’ decisions provide unique insights into the impact of major price changes. Producers’ lagged response in some contexts appear to be due to the ambiguous decision environment they face, their strategic goals and responses to that environment apart from la...

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Bibliographic Details
Published inThe Australian journal of agricultural and resource economics Vol. 45; no. 4; pp. 573 - 598
Main Authors Roy B. Murray-Prior, Vic Wright
Format Journal Article
LanguageEnglish
Published Oxford, UK and Boston, USA Blackwell Publishers Ltd 01.12.2001
Subjects
Agricultural economics
Agricultural policy
Agricultural research
Econometrics
Hierarchical Decision Models
Personal Construct Theory
Prices
Profits
Wool
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Summary:Hierarchical Decision Models of woolproducers’ decisions provide unique insights into the impact of major price changes. Producers’ lagged response in some contexts appear to be due to the ambiguous decision environment they face, their strategic goals and responses to that environment apart from lags caused by factors such as attitude to risk, expectations adjustment, adjustment costs and learning costs. Much of the response to major price changes comes from strategic decisions to change enterprises rather than marginal changes to existing enterprises. In ambiguous environments, methods may need to be found that incorporate simplifying behavioural rules and strategies.
Bibliography:Australian Journal of Agricultural and Resource Economics, v.45, no.4, Dec 2001: (573)-598
ISSN:1364-985X
1467-8489
DOI:10.1111/1467-8489.00158