Explaining Investment Decisions in the South African Biofuels Industry: A Game Theoretic Approach

Thomas Funke and Peter Klein

No 95978, 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa from African Association of Agricultural Economists (AAAE)

Abstract: The production of biofuels and the establishment of a biofuels industry in South Africa have largely been hampered by the structure, procedures and requirements as set out in the Industrial Biofuel Strategy. This article sketches the industry by means of a game theoretic representation. A model is developed that represents the rational strategies of various role players in the industry with respect to investor decision making. In reality this did not occur and the article develops and documents a variable, σ, which in turn helps to represent the current state of affairs. The study explains why current investment decisions in the industry have been made and why certain role players remain indifferent towards any commitment.

Keywords: Agricultural Finance; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 24
Date: 2010
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae10:95978

DOI: 10.22004/ag.econ.95978

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