Formation and adaptation of reference prices in grain marketing: An experimental study

Fabio Mattos and Jamie Poirier

No 148591, Working Papers from Structure and Performance of Agriculture and Agri-products Industry (SPAA)

Abstract: This study examines formation and adaptation of reference prices by Manitoban grain producers. Research shows that preferences are reference‐dependent and marketing decisions are affected by reference prices. Results suggest that Manitoban producers’ reference prices are formed primarily by an average of recent prices and the highest price to‐date in the marketing window. Reference prices are found to adapt in the same direction as market prices, with adaptation to increasing prices being larger than adaptation to decreasing prices. When deciding to sell grain, producers are more likely to sell when they expect prices to decrease over the next month and when their reference price adjusts downwards towards the current price.

Keywords: Agribusiness; Crop Production/Industries; Institutional and Behavioral Economics; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 40
Date: 2013-04
New Economics Papers: this item is included in nep-agr, nep-cbe, nep-exp and nep-mkt
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https://ageconsearch.umn.edu/record/148591/files/M ... SPAA%20WP_2013-2.pdf (application/pdf)

Related works:
Journal Article: Formation and adaptation of reference prices in grain marketing: an experimental study (2016)
Working Paper: Formation and Adaptation of Reference Prices in Grain Marketing: An Experimental Study (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:spaawp:148591

DOI: 10.22004/ag.econ.148591

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