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Efficient Handling of Probability Information for Decision Analysis under Risk

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  • Paul V. Preckel
  • Eric DeVuyst

Abstract

An approach is presented for "condensing" probability distributions so that as much distributional information as possible is preserved. We demonstrate that our approach may be substantially more efficient than alternative methods and, as a result, may permit more realistic modeling of risky decisions.

Suggested Citation

  • Paul V. Preckel & Eric DeVuyst, 1992. "Efficient Handling of Probability Information for Decision Analysis under Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 655-662.
    • Handle: RePEc:oup:ajagec:v:74:y:1992:i:3:p:655-662.
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    File URL: http://hdl.handle.net/10.2307/1242578
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    Cited by:

    1. Featherstone, Allen M. & Kastens, Terry L., 2000. "Non-Parametric and Semi-Parametric Techniques for Modeling and Simulating Correlated, Non-Normal Price and Yield Distributions: Applications to Risk Analysis in Kansas Agriculture," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(2), pages 267-281, August.
    2. Peck, Dannele E. & Adams, Richard M., 2010. "Farm-level impacts of prolonged drought: is a multiyear event more than the sum of its parts?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 1-18.
    3. Padella, Monica & Finco, Adele & Tyner, Wallace E., 2011. "Analysis of the Impacts of EU Biofuels Programs using a GTAP model," Conference papers 332124, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Liu, Yawen & Cui, Qi & Liu, Yu & Zhang, Jinzhu & Zhou, Meifang & Ali, Tariq & Yang, Lingyu & Feng, Kuishuang & Hubacek, Klaus & Li, Xinbei, 2021. "Countermeasures against economic crisis from COVID-19 pandemic in China: An analysis of effectiveness and trade-offs," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 482-495.
    5. Christopher Boyer & B. Brorsen, 2014. "Implications of a Reserve Price in an Agent-Based Common-Value Auction," Computational Economics, Springer;Society for Computational Economics, vol. 43(1), pages 33-51, January.
    6. Dannele E. Peck & Richard M. Adams, 2010. "Farm-level impacts of prolonged drought: is a multiyear event more than the sum of its parts?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 43-60, January.
    7. Musshoff, Oliver & Hirschauer, Norbert, 2008. "Sophisticated Program Planning Approaches Generate Large Benefits in High Risk Crop Farming," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 36865, Agricultural Economics Society.
    8. Brorsen, B. Wade, 2013. "Using Bayesian Estimation and Decision Theory to Determine the Optimal Level of Nitrogen in Cotton," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142951, Southern Agricultural Economics Association.
    9. Dasheng Ji & B. Brorsen, 2011. "A recombining lattice option pricing model that relaxes the assumption of lognormality," Review of Derivatives Research, Springer, vol. 14(3), pages 349-367, October.
    10. Pannell, David J. & Malcolm, Bill & Kingwell, Ross S., 2000. "Are we risking too much? Perspectives on risk in farm modelling," Agricultural Economics, Blackwell, vol. 23(1), pages 69-78, June.
    11. Coulibaly, Nouhoun & Bernardo, Daniel J. & Horn, Gerald W., 1996. "Energy Supplementation Strategies For Wheat Pasture Stocker Cattle Under Uncertain Forage Availability," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 28(1), pages 1-8, July.
    12. Musshoff, Oliver & Hirschauer, Norbert, 2007. "What benefits are to be derived from improved farm program planning approaches? - The role of time series models and stochastic optimization," Agricultural Systems, Elsevier, vol. 95(1-3), pages 11-27, December.
    13. Ahmed, Mohamed M. & Preckel, Paul V. & Baker, Timothy G. & Lopez-Pereira, Miguel, 2001. "Modeling the impact of technological change on nutrition and marketed surplus," Agricultural Economics, Blackwell, vol. 25(1), pages 103-118, June.
    14. Etyang, Martin N. & Preckel, Paul V. & Binkley, James K. & Doster, D. Howard, 1998. "Field time constraints for farm planning models," Agricultural Systems, Elsevier, vol. 58(1), pages 25-37, September.
    15. DeVuyst, Eric A. & Johnson, D. Demcey & Nganje, William E., 2001. "Representations Of Multi-Attribute Grain Quality," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(1), pages 1-16, July.
    16. Christopher N. Boyer & B. Wade Brorsen & James R. Fain, 2015. "Private‐Value Auction Versus Posted‐Price Selling: An Agent‐Based Model Approach," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 22(4), pages 249-262, October.
    17. Abrahams, Nii Adote & Shortle, James S., 1997. "Uncertainty And The Regulation Of Nitrate Pollution From Agriculture," 1997 Annual meeting, July 27-30, Toronto, Canada 21027, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Peck, Dannele E. & Adams, Richard M., 2007. "The persistence of drought impacts across growing seasons: a dynamic stochastic analysis," 101st Seminar, July 5-6, 2007, Berlin Germany 9253, European Association of Agricultural Economists.
    19. Horan, Richard D. & Claassen, Roger & Cooper, Joseph C., 2000. "Environmental Risk And Agri-Environmental Policy Design," 2000 Annual meeting, July 30-August 2, Tampa, FL 21827, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Johnson, D. Demcey & DeVuyst, Eric A. & Nganje, William E., 2000. "Supply-Side Risks And Malting Barley Procurement And Storage," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36367, Western Agricultural Economics Association.
    21. Oliver Musshoff & Norbert Hirschauer, 2009. "Optimizing Production Decisions Using a Hybrid Simulation–Genetic Algorithm Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(1), pages 35-54, March.
    22. David Abler & Adrián Rodríguez & James Shortle, 1999. "Parameter Uncertainty in CGE Modeling of the Environmental Impacts of Economic Policies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(1), pages 75-94, July.
    23. Archer, David W. & Gesch, Russell W., 2002. "Implications Of Temperature-Activated Polymer Seed Coating For Crop Production In The Northern Corn Belt," 2002 Annual meeting, July 28-31, Long Beach, CA 19640, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    24. Horan, Richard D. & Claassen, Roger & Howe, Lance, 2001. "The Welfare Sensitivity Of Agri-Environmental Instruments," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(2), pages 1-19, December.

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