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Transaction Costs and Cattle Marketing: The Information Content of Seller‐Provided Presale Data at Bull Auctions
Author(s) -
Chvosta Jan,
Rucker Randal R.,
Watts Myles J.
Publication year - 2001
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 - 10.1111/0002-9092.00156
Subject(s) - common value auction , incentive , business , transaction cost , herd , database transaction , transaction data , marketing , microeconomics , economics , computer science , database , zoology , biology
At sales out breeding bulls, prospective buyers have strong incentives to undertake presale measurement activities. To reduce these transaction costs, sellers often provide information on sale bulls. We examine the information content of two measures of the expected performance of the bulls and find that within a given herd, older, simpler measures of performance contain more information about prices (from buyers' perspectives) than newer, more sophisticated measures known as expected progeny differences, or EPDs. We also find, however, that buyers appear to pay considerable attention to annual changes in herd‐average EPD values when comparing animals from different sellers.