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Research article2012Peer reviewed

Machinery-sharing in the presence of strategic uncertainty: evidence from Sweden

Lagerkvist, Carl Johan; Hansson, Helena

Abstract

Interpersonal choices related to machinery-sharing collaborations between farmers in the presence of strategic uncertainty were examined by combining personality measures, game theory, and socioeconomic questionnaire results to empirically analyze the formation of voluntary cooperation in collaborations relating to farm machinery. It was found that aversion to probabilistic uncertainty referring to the Ellsberg paradox had no explanatory power. Intolerance of ambiguity as a personal trait proved to be a significant variable explaining collaborative strategies, whereas fear of negative evaluation by others did not significantly affect the choices made. In the repeated game context, the time taken to converge from limited to full collaboration was longer than that needed to dissolve the full collaboration owing to deviating behavior of the other party. These results can be used in developing richer, descriptive, fertile models that explain the formation of more viable farm business structures.

Keywords

Coordination games; Strategic uncertainty; Ambiguity aversion; Psychology; Machinery collaboration; Farmers

Published in

Agricultural Economics
2012, Volume: 43, pages: 113-123 Publisher: WILEY-BLACKWELL