 A PARTIAL-ADJUSTMENT, MIXED LINEAR MODEL OF PRICE DISCOVERY IN AN EXPERIMENTAL MARKET FOR FED CATTLEJared G. Carlberg and Clement Ward No 20598, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Abstract: The Fed Cattle Market Simulator (FCMS) was developed by a team of researchers at Oklahoma State University to aid in understanding the forces that influence price discovery in the fed cattle market. Participants in the FCMS play the role of feedlot marketing managers and packing plant procurement agents, and trade paper pens of cattle in the experimental market. Previous research with the FCMS has not attempted to capture the dynamic nature of the price discovery process; this paper uses a partial-adjustment approach to accomplish that goal. A mixed linear model is used to accommodate both fixed and random effects in the data. Results show that the transaction price adjusts only sixteen percent on a week-by-week basis to its desired level. As such, the price discovery process in the experimental market is said to be characterized by slow adjustment, due in part to biological lags in the beef supply chain. This result will be useful in enhancing understanding of the real fed cattle market. Keywords: Livestock; Production/Industries (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20598 Access Statistics for this paper More papers in 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Contact information at EDIRC. |
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