Agricultural Entrepreneurs' Decision Making and Structural Change: An Experimental Approach

• Applicant: Professor Dr. Christian D. Schade
• Subject Area: Agricultural Economics, Agricultural Policy, Agricultural Sociology
• Term: from 2007 to 2015
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 53162462

The rational calculus of farmers assumed in many agricultural economic models is unrealistic and non-predictive of their actual decision making. Understanding structural change in agriculture can thus be improved via a realistic modeling of the decision making by agricultural entrepreneurs. Specifically, slow disinvestment (i.e., postponing farm exit), persistence of market structures (i.e., failure to reallocate land plots towards higher efficiency), and more generally characterizing the decision making of farmers are crucial for a better understanding of structural change and policy advice. We apply economic experiments to better understand such disinvestment choices, land markets with economies of scale and private opportunity costs, different auction and bargaining forms to improve allocation efficiency of land markets, and to generally characterize the decision making of farmers.

• DFG Programme: Research Units
• Subproject of: FOR 986: Structural Change in Agriculture