2011

December, 2011

By: McCullough, Michael; Holland, David W.; Painter, Kathleen M.; Stodick, Leroy; Yoder, Jonathan K.
A computable general equilibrium model is used to analyze the effectiveness of policy alternatives at achieving biofuel-related goals in Washington State. Policy regimes compared include blend mandates, generally funded volumetric and CO2e (CO2 equivalent) emissions-based tax/subsidy regimes, and revenue-neutral funded tax/subsidy regimes that use fossil fuel taxes to fund renewable fuel subsidies. Results suggest that a revenue-neutral CO2e emissions-based tax/subsidy is arguably the most effective single alternative for pursuing the full set of objectives emphasized in recent Washington State legislation.

December, 2011

By: Ubilava, David; Barnett, Barry J.; Coble, Keith H.; Harri, Ardian
We investigate potential effects of the Supplemental Revenue Assistance Payments (SURE) program introduced in the 2008 Farm Bill. Results suggest little impact on optimal crop insurance purchase decisions, though the SURE program does seem to provide an incentive for mid-level insurance coverage. For producers in the price counter-cyclical payment (PCCP) program, SURE payments are actually higher (lower) when commodity prices are high (low). This is not the case for producers in the Average Crop Revenue Election (ACRE) program.

August, 2011

By: Aadland, David; Koplin, Van
Successful formation and long-term stability of cooperative ventures is often linked to the perceived fairness of the cost and resource allocations that these ventures employ. Indeed, the lack of a consensus over what basis should be used for gauging equitable allocation can undermine the prospects for collaboration. We use irrigation cost sharing as a context for examining the equity basis selections of cooperative ventures that successfully form and endure. Our analysis reveals that these selections are explained by features of the cooperative environment and inequities in the derived benefits from the irrigation water.

August, 2011

By: Morawetz, Ulrich B.; De Groote, Hugo; Kimenju, Simon Chege
Experimental auctions have not been widely used in Africa. However, auctions are important tools for evaluating new products and technologies. To increase the quality of these experiments, we explore an alternative first-price bidding mechanism that is more similar to African market exchanges and we analyze factors likely to affect bidding. Experiments with African consumers show that the proposed first-price mechanism has no advantage over conventional second-price mechanisms. Results show high and significant cash-in-hand, experimenter, and time of day effects in main rounds, and significant ordering effects in test rounds. These effects need to be carefully considered when applying the Becker-DeGroot-Marschak mechanism in Africa.

August, 2011

By: Silva, Andres; Nayga, Rodolfo M., Jr.; Campbell, Benjamin L.; Park, John L.
We assess the reduction of hypothetical bias in consumers’ willingness to pay (WTP) for products by applying a generic, short, and neutral cheap talk script in a retail setting. Using an open-ended elicitation mechanism with non-hypothetical, hypothetical, and hypothetical with cheap talk treatments, our results indicate that the hypothetical WTP values are higher than the nonhypothetical values, but the hypothetical with cheap talk values are not significantly different from non-hypothetical estimates.

August, 2011

By: Melkonyan, Tigran A.
Decision makers are frequently confronted with ambiguous risk information about activities with potential hazards. This may be a result of conflicting risk estimates from multiple sources or ambiguous risk information from a single source. The paper considers processing ambiguous risk information and its effect on the behavior of a decision maker with a-maximin expected utility preferences. The effect of imprecise risk information on behavior is related to the content of information, the decision maker’s trust in different sources of information, and his or her aversion to ambiguity.