The Value of Information in a Storage Model with Open and Closed Loop Controls: A Numerical Example

David F. Bradford and Harry H. Kelejian, Journal of Economic Dynamics and Control 3, 307-317, November .

Abstract:

In previous papers we estimated the value of information relating to wheat crop forecasting under the assumption that speculative inventory holders are open-loop feedback expected profit maximizers. If in fact inventory holders are closed-loop maximizers, our estimates would be biased. In this paper we provide a numerical illustration of the sorts of biases that might be involved.

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