Implications of Behavioral Finance for Farmer Marketing Strategy Recommendation

B Brorsen and Kim B. Anderson

No 18952, 2001 Conference, April 23-24, 2001, St. Louis, Missouri from NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: Behavioral finance is a relatively new field of inquiry that may help better understand farmer marketing. The theory argues that people tend to make certain psychological biases that cause them to not be fully rational in an economic sense. For example, people tend to be about twice as upset about a loss as they would be happy about a gain of the same size. The theory can help explain why producers would pay a marketing consultant even when markets are efficient. Extension programs need to consider the psychology of marketing. The theory suggests that decisions need to be framed in terms of their effect on the whole farm operation and in terms of profits over a series of years.

Keywords: Agricultural Finance; Marketing (search for similar items in EconPapers)
Pages: 7
Date: 2001
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ncrone:18952

DOI: 10.22004/ag.econ.18952

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