Diersen, Matthew A.

April, 2005

Valuation and Efficient Allocation of GSM Export Credit Guarantees

By: Diersen, Matthew A.; Sherrick, Bruce J.
Estimates of country-level loan default distributions are developed and used in a loan guarantee model to value the contingent liability of USDA's General Sales Manager (GSM) export credit guarantee portfolio. The results quantify the relationship between increasing guarantee coverage and the resulting actuarial liability to the government. Optimal coverage levels and optimal country-level allocations are determined for given policy objectives and coverage totals. Findings reveal that the government's allocation of country guarantees is risk-inefficient; and guidance is provided for making risk-efficient allocations for any program size.
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December, 2004

The Voluntary Reporting System’s Ability to Provide Price Transparency in the Cash Market for Dressed Steers: Evidence from South Dakota

By: Fausti, Scott W.; Diersen, Matthew A.
The informational value of USDA's former voluntary price reporting system is investigated for dressed-weight slaughter steers sold by South Dakota producers. The ability of the former system to promote price transparency in the cash market is evaluated using state-level mandatory price reporting data collected from September 1999 to April 2001. The empirical framework examines the informational value of public price reports according to the criteria established in the market integration literature. The empirical results indicate that in the South Dakota cash market for dressed weight steers, the voluntary price reporting system fostered price transparency, and thus contributed to the price discovery process. Empirical evidence is also presented suggesting that strategic price reporting by market participants to influence the voluntary price reporting system was not detected during the period covered in this study.
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July, 2001

COMPETITIVE BIDDING ON IMPORT TENDERS: THE CASE OF MINOR OILSEEDS

By: Wilson, William W.; Diersen, Matthew A.
A common and noteworthy application of auctions and bidding is that of tendering for imports, used for both price determination and the allocation of purchases among sellers. In this study we develop a model to evaluate bidding strategies and competition and apply it to Egyptian oilseeds imports. Generally, bids could be explained with a relatively high degree of confidence using accessible data. In addition, there appear to be groups of bidders characterized by differences in their bid functions. These statistical results were used to determine optimal bids and evaluate the effects of several critical variables. The results are particularly interesting for understanding sellers' bidding strategies and competition among rivals, as well as impacts of specific variables on optimal bids and payoffs to sellers.
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