A Game Theoretic Model for Farm Planning under Uncertainty

Abstract

NCERTAINTY has long been recognized as an important aspect of farm planning. It was only recently, however, that different approaches to the problem of uncertainty in farm planning have been suggested [2, 5, 6, 7, 9]. These approaches employed techniques such as dynamic programming, game theory, quadratic programming, simulation, and stochastic linear programming. The game approach suggested by McInemey [5] was the first attempt that we have found in the farm management literature to incorporate farm constraints in a game against nature. McInerey's model, however, provides solutions only for the Wald maximin criterion. Decision criteria other than the Wald maximin may be more appealing to some farmers. This paper presents a model that incorporates farm constraints in a game against nature in a different manner from that of McInerney's model. The proposed model enables a farmer to obtain solutions for the maximin criterion and other decision criteria.