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Representation of Farmers' Behavior under Uncertainty with a Focus‐Loss Constraint
Author(s) -
Boussard JeanMarc,
Petit Michel
Publication year - 1967
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 - 10.2307/1236943
Subject(s) - focus (optics) , constraint (computer aided design) , representation (politics) , computer science , mathematics , psychology , mathematical economics , econometrics , political science , physics , geometry , politics , law , optics
This article presents a method for taking uncertainty into account when representing farmers' production decisions. The main assumption is that farmers maximize their profit provided that the possibility of ruin is negligible. The possibility of ruin is viewed as being closely related to Shackle's focus of loss. Results of a study incorporating the analytical apparatus developed from this assumption are given here. In the particular case of farmers in southern France, the results lend support to the proposed procedure, in spite of the arbitrariness involved in estimating some parameters, and particularly the foci of loss.