How laboratory experiments could help disentangle the influences of production risk and risk preferences on input decisions

Bougherara, Douadia and Nauges, Céline (2018) How laboratory experiments could help disentangle the influences of production risk and risk preferences on input decisions. TSE Working Paper, n. 18-903, Toulouse

[img]
Preview
Text
Download (785kB) | Preview
Official URL: http://tse-fr.eu/pub/32566

Abstract

The purpose of this article is to further our understanding of input choices (such as pesticides or fertilisers) when producers face production risk that depends on a random shock and on the quantity of input used. Using laboratory experiments, we study the role of risk preferences and public policies (here, a lump-sum subsidy and insurance) on producers’ input decisions in two situations: i) a risk-decreasing input; and ii) a risk-increasing input. Our findings raise questions on the sensitivity of optimal input choices to risk preferences and the relevance of the expected utility model to describe farmers’ decisions.

Item Type: Monograph (Working Paper)
Language: English
Date: March 2018
Place of Publication: Toulouse
Uncontrolled Keywords: laboratory experiment, input choice, production risk, risk preferences, subsidy, insurance
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 24 Apr 2018 11:21
Last Modified: 24 Jul 2018 12:33
OAI ID: oai:tse-fr.eu:32566
URI: http://publications.ut-capitole.fr/id/eprint/25886

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year