The Role of Strategic Uncertainty in Area‐wide Pest Management Decisions of Florida Citrus Growers

Abstract

AbstractWe elicit a measure of strategic uncertainty from growers by using an experimental game grounded on the theory of global games. This allows us to achieve the following: propose a mechanism for measuring strategic uncertainty aversion; compare growers' risk aversion to their strategic uncertainty aversion; explore how growers' strategic uncertainty aversion is affected by changes in group size and coordination requirement; and relate a strategic uncertainty aversion measure to growers' actual decisions to participate in an area‐wide pest management program. In our experimental setting, we found that when the coordination requirement for a successful outcome is low, most growers see the strategic uncertainty posed by human interaction as more favorable in terms of expected payoffs relative to a game against nature. In contrast, when the coordination requirement is high, most growers expect lower payoffs and choose to coordinate less. We also found evidence that growers' strong beliefs about neighbors not coordinating negatively impacted their choices to coordinate. Our measure of strategic uncertainty was also found to influence the likelihood of growers to actually coordinate sprays. Our findings help explain why participation in area‐wide pest management to control the vector of citrus greening across Florida has not been as widespread as expected; the strategic uncertainty involved in relying on neighbors has made many growers choose self‐reliance in spraying despite the lower payoff.