Production decision of agricultural products: A game model based on negative exponential utility function

Abstract

The effective supply guarantee of fresh agricultural products is a systematic problem. Farmers should not only pursue economic effectiveness, but also ensure the quality of products. This paper analyzes the supply decision of agricultural products based on negative exponential utility function and game analysis. The negative exponential utility function has been widely used in the study of the risk preferences of farmers. This paper analyses the impact of price fluctuation on the supply of agricultural products. At the same time, it analyses the problem of quality and safety from the perspective of the main body of agricultural products supply under the framework of economics. The income of agricultural products is an important factor affecting their behavioral decision-making. The result shows that: (1) price affects utility values by affecting the profit values and the mean risk-aversion coefficients; (2) market competition gives producers and operators inherent motivation to improve the quality of agricultural products. In the process of production decision-making, it is necessary to ensure that the profit of supplying safe agricultural products is not less than that of supplying conventional agricultural products. Therefore, the government can adopt economic incentive and policy incentive mechanism to protect the economic interests of the main body of safe agricultural products supply.