Games of farmers – to cooperate or not?

Takács, István (2012) Games of farmers – to cooperate or not? ANNALS OF THE POLISH ASSOCIATION OF AGRICULTURAL AND AGRIBUSINESS ECONOMISTS, 14 (6). pp. 260-266. ISSN 1508-3535

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Abstract

Signs of the crisis of the Hungarian agriculture are in relation with the economic and social model that has become rigid throughout the past two decades. The evolved structure of agricultural holdings the networks among the farmers have been restructured as well as have become losen. The degree of trust has decreased. Based on the principles of the modern economic schools, e.g. the game theory, the study examines how the existing trust level among farmers affects the farmers’ preferences of choice among the different forms of dependencies, as well as which factors affect the individual utility functions, focused on the role of subsidies from the social transaction costs. Due to the information asymmetry between farmers and the lack of confidence, the individual and the social expenditures are higher than economically justifable. Based on a simulation model the paper examines the payoffs of the farms as well as the community from the point of view of machinery use and investment strategies.

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