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Producer Decision Making under Uncertainty: Role of Past Experiences and Question Framing
Author(s) -
Tonsor Glynn T
Publication year - 2018
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/aay034
Subject(s) - framing (construction) , loss aversion , economics , framing effect , willingness to accept , outcome (game theory) , willingness to pay , econometrics , actuarial science , microeconomics , public economics , psychology , social psychology , geography , archaeology , persuasion
Limited research examines the role of reference points or how uncertain outcomes are processed in producer decisions. This study employs a survey containing a split‐sample choice experiment varying how uncertain outcomes are portrayed, and assesses multiple candidate reference points. Results suggest that U.S. cattle producers use the best outcome experienced as reference points in their decisions, and the method by which uncertain outcomes are presented impacts loss aversion, marginal willingness to pay, and market participation estimates. This illustrates how research employing split samples, multiple reference points, and alternative methods of portraying uncertain outcomes may better identify producer decision‐making.