Risk, market imperfections and the growth of an aquacultural firm

Type Report
Date 1986
Language English
Author(s) Gates J.M., Gilly Bernard
Mot-Clé(s) SEM
Abstract (Not controled OCR) Economic literature is replete with discussions of risk, market imperfections and firm growth ; often as separate topics. A discussion of risk must inevitably mention Frank Knight's classic contributions to the topic and his dichotomy between risk and uncertainty. Subsequent work has blurred this distinction by introducing subjective probability and expected utility maximization. Subsequent work has also shed doubt on the validity of the expected utility hypothesis in willingness to pay gambles and yet sustained it in the context of aggregate market behavior and "testable hypotheses" (Knez, et al, 1985). to this vast and complex literature we do not aspire to contribute much that is new. Instead we will attempt to apply concepts to a problem in aquaculture using linear programming ; a tool widely used in economics, operations research and industrial engineering. The application will involve molluscan culture ; specifically the European flat oyster (Ostrea edulis). The choice of species reflects continuing research programs at IFREMER. We are indebted in particular to DR H. Grizel and A. Martin whose meticulous observations over three years have enabled us to calibrate the model to the situation in France. The model equations are elaborated in a working paper by Gates and Gilly (1986). A copy may be obtained from the authors.
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