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© 1998 Oxford University Press and the Foundation for the European Review of Agricultural Economics

research-article

Producers' loss due to asymmetric information: An application to a specific case

SYLVETTE MONIER-DILHAN and HERVÉ OSSARD*

Sylvette Monier-Dilhan and Herve Ossard INRA P.O. Box 27 31326 Castanet-Cedex France
INRA, France

Received January 1, 1998;

Summary

In this paper we estimate the loss of revenue to producers due to asymmetric information in markets for perishable agricultural products. The theoretical framework is the first-price auction model with the independent private values paradigm. Following Laffont, Ossard and Vuong (1995), we use a structural approach. We compute the loss to producers, that is, the extra profit of the buyer due to asymmetric information. Our results indicate that the buyer's informational rent is about 10 per cent of the observed price

Keywords: auction, asymmetric information, agricultural markets


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