Sequential Decision Making in Production Models

John M. Antle

No 279107, 1983 Annual Meeting, July 31-August 3, West Lafayette, Indiana from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Single equation estimates of production models usually are justified by the assumption that production inputs are chosen as part of a one-period decision problem. Yet, most production decisions in agriculture are made sequentially. In this paper the farmer's optimal input choices are modeled as optimal controls in a stochastic control problem. A two-period Cobb-Douglas example is used to show that sequential solutions to production problems may yield models which require either single equation or simultaneous equation estimators. Functional separability, stochastic specification, and behavior under uncertainty are discussed in the context of dynamic production models.

Keywords: Farm Management; Production Economics (search for similar items in EconPapers)
Pages: 9
Date: 1983-08
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Citations: View citations in EconPapers (54)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea83:279107

DOI: 10.22004/ag.econ.279107

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