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A Dynamic Analysis of Marketing Orders, Voting, and Welfare
Author(s) -
Berck Peter,
Perloff Jeffrey M.
Publication year - 1985
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 - 10.2307/1241067
Subject(s) - futures studies , economics , voting , microeconomics , welfare , profit (economics) , order (exchange) , short run , marginal cost , econometrics , computer science , market economy , finance , politics , political science , law , artificial intelligence
This paper presents a dynamic model of how profit‐maximizing farmers would vote on marketing order rules given that new firms will enter, based on rational expectations (perfect foresight) about the path profits follow. Early entrants make large short‐run gains while, in the long run, marginal firms break even. Welfare analyses under a dynamic model differ substantially from the static analyses normally reported.