Diversification, a central issue in the study of capital allocation, has much to do with symmetries and asymmetries in the distribution of asset returns. A diversified portfolio imposes symmetry on the allocation vector in order to balance out much of the asymmetries in the returns vector. Using...

When nonpoint source pollution is stochastic and the damage function is convex, intuition might suggest it is more important to control a nonpoint pollution source than a point source. Earlier research has provided sufficient conditions such that the permit price for a unit of ex-ante expected...

Protection against pest invasion is a public good. Yet the nature of private incentives to avoid entry is poorly understood. This work shows that, due to increasing returns or network effects, private actions to avoid entry are strategic complements. This means that compulsory action, at least...

Concerns about biosecurity in the food system raise a variety of issues about how the system is presently organized, why it might be vulnerable, what we could reasonably do to better secure it, and the costs of doing so. Emphasizing the role of incentives in efficient resource allocation, this...

Empirical studies point to negative crop yield skewness, but the literature provides few clear insights as to why. This paper formalizes three points on the matter. Statistical laws on aggregates do not imply a normal distribution. Whenever the weather-conditioned mean yield has diminishing...

No satisfactory motivation has been forwarded in favor of any crop yield distribution, including thenormal. This article explores the foundations of yield distributions for the Law of the Minimum resourceconstraint technology at the plot level of analysis.With independent, identical, uniform...

After entering into a farmland cash rent contract in the fall, a tenant farmer has flexibility over the spring crop choice and the input application level. Failure to account for these options will bias estimates of what farmers should pay to rent land. Applying Monte Carlo simulation methods,...

Suppose one could expend effort to prevent probabilistic transition to an adverse state, and also effort to expedite probabilistic transition to a beneficial state. Bearing in mind that the efforts occur in different states, should these efforts substitute or complement? Two appealing arguments...

The probability of alienspecies invasion is reasonably characterized by a weakest link technology. A tradeableriskpermit system for shippers has been proposed as a means of efficiently reducing this invasion probability. Economic jointness arising from statistical independence among private...

Iowa's farmland consists of over 16% hay crops and pastureland, a significant portion of which is under cash rental contracts. This study investigates the comparative relationships between cash rental rates for cropped land and non-cropped land, where the latter includes hay and pastureland. We...