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Asymmetric information in managing agricultural production risk

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  • Jindřich Špička

Abstract

The aim of the paper is to apply a theory of asymmetric information to managing production risk in agriculture. The second part of the paper is devoted to the tools for reducing the information asymmetry - parametric products (weather derivatives, index insurance). The results are based on empirical analyses published in scientific journals. The findings were consulted with specialists on agricultural insurance in the Czech Republic. The results indicate the existence of moral hazard and adverse selection in farmers' behaviour. The article is a theoretical basis for definition of weather derivatives in agriculture.

Suggested Citation

  • Jindřich Špička, 2010. "Asymmetric information in managing agricultural production risk," Ekonomika a Management, Prague University of Economics and Business, vol. 2010(2).
    • Handle: RePEc:prg:jnleam:v:2010:y:2010:i:2:id:97
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    References listed on IDEAS

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    5. Richard E. Just & Linda Calvin & John Quiggin, 1999. "Adverse Selection in Crop Insurance: Actuarial and Asymmetric Information Incentives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 834-849.
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    More about this item

    Keywords

    Řízení rizik; Zemědělství; Agriculture; klimatické deriváty; informační asymetrie; Weather derivatives; Risk management; Information asymmetry;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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