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The Advantage of Resource Queues over Spot Resource Markets: Decision Coordination in Experiments under Resource Uncertainty
Author(s) -
Fonseca Miguel A.,
Pfaff Alexander,
Osgood Daniel
Publication year - 2012
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aas065
Subject(s) - ex ante , resource (disambiguation) , key (lock) , business , queue , environmental economics , natural resource economics , industrial organization , microeconomics , economics , operations management , computer science , computer network , computer security , macroeconomics , programming language
Farmers have to make key decisions, such as which crops to plant or whether to prepare the soil, before knowing how much water they will get. They face losses if they make costly decisions but do not receive water, and they may forego profits if they receive water without being prepared. We consider the coordination of farmers’ decisions, such as which crops to plant or whether to prepare the soil when farmers must divide an uncertain water supply. We compare ex‐ante queues (pre‐decision) to an ex‐post spot market (post‐decision & post‐rain) in experiments in rural Brazil and a university in England. Queues have greater coordination success than does the spot market.