TAILIEUCHUNG - Game theory as an instrument for identifying constraint on implementation of contract to purchase farm product

Contract to purchase farm products is a means of reducing risks caused by price fluctuations. If the contract is not carried out, loss is much bigger than compensations for both parties because buying party does not have raw materials it needs while the selling one cannot sell its produce. | Researches & discussions Contract to purchase farm products is a means of reducing risks caused by price fluctuations. If the contract is not carried out, loss is much bigger than compensations for both parties because buying party does not have raw materials it needs while the selling one cannot sell its produce. One of the main causes of breach of contract is the inappropriate and unscientific definition of constraint (or fine). This research tries to identify coefficient of constraints using the game theory and find that the coefficient of constraint on implementation of the contract to buy farm product should be equal to or U D greater than P -F P % of the value of P the contract. Keywords: Nash equilibrium; normal-form game; price at the end of period; constraint. * University of Economics - HCMC O ne of measures to reduce risk caused by fluctuations in price of farm products is the contract to sell between peasants and companies (food processing or agricultural materials companies, or exporters of farm products) that sets some fine or compensation as a measure to ensure interests of involved parties. This model, however, is usually broken by fluctuations in market price at harvest time and inappropriate compensation, because the coefficient of constraint on implementation of the contract is not determined scientifically. This paper has two main contents: (1) scientific basis for identification of coefficient of constraint; and (2) policy implications that aim at perfecting the contract to sell with a view to reducing risks for peasants. I. SCIENTIFIC BASIS FOR ESTABLISHEMENT OF COEFFICIENT OF CONSTRAINT 1. Basic arguments of the game theory according to Mankiw, 2003 [1], the classic problem widely used as an example of the game theory is the prisoner’s dilemma that could be presented in the following matrix: Economic Development Review - January 2011 37 Researches & discussions Table 1: Prisoner’s dilemma Player Prisoner .

• Kinh tế học
• Nash equilibrium
• Normal form game
• Price at the end of period
• Game theory
• Basic arguments of the game theory
• Two players game
• Quadratic payoff functions
• Constructive graphical method
• Project network
• Risk response
• Genetic algorithm
• Principles of economics
• Lecture Principles of economics
• Monopolistic competition
• Equilibrium for oligopoly
• Principles of microeconomics
• Lecture Principles of microeconomics
• Pareto Optimal
• Matrix Representation
• Strategic Game
• Battle of the Sexes
• báo cáo hóa học
• công trình nghiên cứu về hóa học
• tài liệu về hóa học
• cách trình bày báo cáo
• The sum of combinatorial games
• Some examples
• General hide and seek games
• A further example
• Potential games
• An introduction to auction theory
• Bayesian nash equilibrium
• The independent private values model
• Affiliated values
• Common value
• Private values
• Large scale projects
• Contractor selection process for large scale projects
• Lecture Microeconomics
• Bài giảng Kinh tế vi mô
• Kinh tế vi mô
• Differentiated products
• Price effects