A theory of short-run competitive firm behavior allowing for nonmyopic risk aversion, randomness in input and output prices, as well as forward trading and storage of final good and material input is introduced. If the firm is a forward looking risk-averse expected-utility maximizer, separation...

Decision making under unknown true parameters (estimation risk) is discussed along with Bayes and parameter certainty equivalent (PCE) criteria. Bayes criterion provides the solution for optimal decision making under estimation risk in a manner consistent with expected utility maximization. The...

Estimation risk occurs in the almost universal situation where parameters of importance for decision making are not known with certainty. Bayes' criterion is the procedure consistent with expected utility maximization in the presence of estimation risk. Three interrelated problems in the...

Production and hedging in both forward and options markets are analyzed for forward-looking firms that maximize expected utility. In the presence of unbiased forward and options prices, it is shown that such firms will use options as hedging instruments. This result contrasts with the...

The study focuses on the production and hedging behavior of forward-looking risk-averse competitive firms. It is shown that there is separation between production and hedging. Optimal production for a forward-looking firm is identical to that of an otherwise equivalent myopic firm. However, the...

This study of the firm under uncertainty relaxes the standard single production cycle assumption. Under realistic circumstances, a forward-looking risk-averse firm will produce more than a risk-neutral firm, and an increase in the mean-preserving price spread will increase the risk-averse firm's...

This report lays out the economic arguments in favor of the establishment of farmer-owned brands in Midwestern agriculture and presents four case studies based on successful efforts in this area in the European Union and the United States. The case studies involve Parma Ham, Brunello di...

This report lays out the economic arguments in favor of the establishment of farmer-owned brands in Midwestern agriculture and presents four case studies based on successful efforts in this area in the European Union and the United States. The case studies involve Parma Ham, Brunello di...

Testimony before the US-China Economic and Security Review Commission on April 25, 2013, by Dermot Hayes, professor of Economics and Finance, Iowa State University. Testimony covers impacts on food demand from China's rising incomes and urbanization; the viability of China's attempt to remain...

We update the findings of the impact of ethanol production on U.S. and regional gasoline markets as reported previously in Du and Hayes (2009 and 2011), by extending the data to December 2011. The results indicate that over the period of January 2000 to December 2011, the growth in ethanol...