Grain marketing strategies within and across lifetimes

Hikaru Hanawa Peterson, William G. Tomek

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

To reconcile the discrepancy between the efficient market hypothesis and grain marketing recommendations by advisory services and extension programs, simulated prices from an efficient market are used to compare performance of marketing practices over the long run and in individual 40-year periods. We find that an efficient market can generate diverse price behavior within finite samples, allowing for strategies that are inferior on average to perform relatively better, as frequently as half of the time in an average 40-year lifetime. Lifetime returns of strategies show considerable overlap, suggesting extremely low confidence in recommendations made based on short samples.

Original languageEnglish (US)
Pages (from-to)181-200
Number of pages20
JournalJournal of Agricultural and Resource Economics
Volume32
Issue number1
StatePublished - Apr 1 2007

Keywords

  • Commodity storage model
  • Efficient market
  • Finite sample
  • Grain marketing
  • Long run
  • Rational expectations
  • Simulation

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