This paper develops theoretical and empirical models to understand how farmers formulate their participation strategies when deciding to enroll in the Conservation Reserve Program (CRP) under uncertainty. A theoretical model is employed to obtain the impacts of various factors on the optimal...

Risk aversion is a key element of utility maximizing hedge strategies; however, it has typically been assigned an arbitrary value in the literature. This paper instead applies a GARCH-in-Mean (GARCH-M) model to estimate a time-varying measure of risk aversion that is based on the observed risk...

The objective of this paper is to develop an analytical framework for estimation of the parameters of a structural model of an incentive contract under moral hazard, taking into account agents heterogeneity in preferences. We show that allowing the principal to strategically distribute the...

Suckler cow production in France relies mainly on a relatively extensive management of forage, implying that production risk may be enhanced by the sensitivity of those crops to weather variability. However risk exposure is supposed to be mitigated either through ex-ante decisions concerning...

This paper examines the optimal location of a competitive firm in response to environmental costs imposed by the abatement investment and taxes when the cost of the environmental regulation varies spatially under uncertainty. It contributes to the literature by incorporating the spatial setting...

The functional specification of mean-standard deviation approach is examined under location and scale parameter condition. Firstly, the full set of restrictions imposed on the mean-standard deviation function under the location and scale parameter condition are made clear. Secondly, the...

This paper develops a framework to link the expected utility analysis to real options models in order to capture the joint effects of risk aversion and irreversibility associated with real investments. It aims at modifying the theory of investment under uncertainty by incorporating decision...