Optimal Storage Decisions under Estimation and Prediction Risk

Tommie L. Shepherd and Jeffrey H. Dorfman

No 285658, 1981-1999 Conference Archive from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: Estimation and prediction risk are shown to influence the optimal storage decision of a dominant firm facing a competitive fringe. The presence of risk with respect to demand estimation and supply prediction results in increased storage by a dominant firm exercising market power in a two period profit maximization scenario. Bayesian numerical integration is employed to derive the optimal storage decision for a hypothetical cooperative of Georgia pecan growers facing demand estimation risk, supply prediction risk and a combination of the two.

Keywords: Marketing (search for similar items in EconPapers)
Date: 1996-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/285658/files/confp14-96.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:nc8191:285658

DOI: 10.22004/ag.econ.285658

Access Statistics for this paper

More papers in 1981-1999 Conference Archive from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management
Bibliographic data for series maintained by AgEcon Search ().