Decisions under Uncertainty: An Empirical Application and Test of Decision Theory in Agriculture

Lin , Wen-Rong (1970) Decisions under Uncertainty: An Empirical Application and Test of Decision Theory in Agriculture. PhD thesis, University of California.

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This study presents an empirical application and test of alternative theories of decision making under uncertainty. Three theories Bernoullian utility, lexicographic utility, and profit maximization -- were compared to determine their abilities to explain and predict actual producer behavior on six large case study farms in the Central Valley of California. The study involved the following steps for each farm: Derivation of subjective probability distributions for crop yields and prices; incorporation of the subjective distributions into a net income variance-covariance matrix; derivation of "before tax' mean-variance (C-V) boundaries using quadratic programming; adjustment of the E-V boundaries to an "after-tax" basis using Monte Carlo simulation; derivation of Bernoullian utility functions through a modified version of the Ramsey model; derivation of lexicographic utility functions through direct Interviews; statistical tests of the relative accuracy of the alternative utility theories in predicting actual and planned decisions: and tests of the effects of income taxes on producer decisions within a risk framework.

Item Type: Thesis (PhD)
Author Affiliation: University of California
Subjects: Statistics and Experimentation
Crop Improvement
Divisions: General
Depositing User: Mr Arbind Seth
Date Deposited: 05 Jul 2013 04:25
Last Modified: 05 Jul 2013 04:25

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