Captive supplies and cash market prices for fed cattle: a dynamic rational expectations model of delivery timing

摘要: Several empirical analyses of data from fed cattle markets have found a negative correlation between region's weekly delivery volume captive supply and contemporaneous price in the local cash market. This has been cited as evidence causal relationship two variables; which buyers (beef packing plants) use procurement an instrument to depress prices paid market sellers (feeders). paper investigates circumstances under this regularity might emerge benign artifact buyer seller behavior both sides are takers. One feature these is that marketing agreement (the predominant method) spot some flexibility scheduling order take advantage expected changes. The effect type inter-temporal arbitrage on dynamics investigated using simulation methods applied rational expectations model timing incentives.