THE COMPETITIVE FIRM'S WILLINGNESS TO PAY FOR INFORMATION

James A. Chalfant, Israel Finkelshtain and Richard Gray

No 270477, 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: We examine the competitive firm's willingness to pay for a perfect price forecast. The conventional compensating variation measure can understate the value to risk-averse firms of such a forecast. A Pareto efficient contract contingent on realized prices dominates and shows that information's value is larger the greater is risk aversion.

Keywords: Demand and Price Analysis; Institutional and Behavioral Economics; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 14
Date: 1989-07-30
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea89:270477

DOI: 10.22004/ag.econ.270477

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