A Theoretical and Empirical Approach to the Value of Information in Risky Markets
The Review of Economics and Statistics
1986
The theory of the competitive firm under price uncertainty is used to develop a money metric of a producer's willingness to pay for additional information. This concept is extended to the market by formulating ex-ante and ex-post measures of the value of a rational expectations forecast. The empirical feasibility of these measures are demonstrated by application to a simple two equation model of an agricultural market.
- DOI
- 10.2307/1924933
- Volume
- 68 (1)
- Pages
- 105
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