Transaction Costs and Cattle Marketing: The Information Content of Seller-Provided Presale Data at Bull Auctions |
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Authors: | Jan Chvosta Randal R Rucker & Myles J Watts |
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Institution: | Department of Agricultural and Resource Economics, North Carolina State University,;Department of Agricultural Economics and Economics, Montana State University |
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Abstract: | At sales of breeding bulls, prospective buyers have strong incentives to undertake presale measurement activities. To reduce these transaction costs, sellers often provide information on sale bulls. We examine the information content of two measures of the expected performance of the bulls and find that within a given herd, older, simpler measures of performance contain more information about prices (from buyers' perspectives) than newer, more sophisticated measures known as expected progeny differences, or EPDs. We also find, however, that buyers appear to pay considerable attention to annual changes in herd-average EPD values when comparing animals from different sellers. |
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Keywords: | breeding bulls expected progeny differences transaction costs |
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