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An experimental analysis of the behavior of forestry decision-makers — The example of timing in sales decisions

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  • Musshoff, Oliver
  • Maart-Noelck, Syster Christin
Abstract
Despite the existing literature, it is still unclear whether and to what extent the behavior of forestry decision-makers can be predicted by means of normative models. To date, the actual decision-making behavior regarding logging has hence been only derived from the analysis of data gathered in surveys or on the basis of aggregated data. Currently, no studies exist that compare the individual timber harvesting behavior with a normative benchmark. The present study experimentally examines the behavior of decision-makers from forestry organizations by means of the example of selling a one-off property with a normative benchmark derived using the Jevons–Fisher rule. We investigate if the intuitive behavior shown by forestry decision-makers in an incentive-compatible experiment for the sale of a one-off property can be approximated to the optimal behavior according to the Jevons–Fisher rule. For determining the normative benchmark, the decision-maker's risk attitude measured by a Holt and Laury lottery is explicitly taken into account. The results reveal that, on average, participants decide earlier for selling the property than what would be expected according to the normative benchmark. This illustrates the importance of experimental investigations in order to better understand the decision-making behavior in a forestry setting. Furthermore, the findings indicate that risk-averse participants, males, participants who completed a forestry apprenticeship as well as participants with an economic-related educational background sell the property earlier. Older participants, participants holding a university degree, and participants interested in participating in further experiments sell the property rather later. Moreover, with progressive repetition of the property sale experiment, participants decide to sell the property earlier.

Suggested Citation

  • Musshoff, Oliver & Maart-Noelck, Syster Christin, 2014. "An experimental analysis of the behavior of forestry decision-makers — The example of timing in sales decisions," Forest Policy and Economics, Elsevier, vol. 41(C), pages 31-39.
    • Handle: RePEc:eee:forpol:v:41:y:2014:i:c:p:31-39
    DOI: 10.1016/j.forpol.2013.12.006
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    Cited by:

    1. Patrice Loisel & Marielle Brunette & Stéphane Couture, 2020. "Insurance and Forest Rotation Decisions Under Storm Risk," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(2), pages 347-367, July.
    2. M. Brunette & M. Hanewinkel & R. Yousefpour, 2020. "Risk aversion hinders forestry professionals to adapt to climate change," Climatic Change, Springer, vol. 162(4), pages 2157-2180, October.
    3. Sauter, Philipp & Mußhoff, Oliver, 2015. "Forestry harvesting decisions in contrast to theory? Evidence from an economic experiment," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 202579, Australian Agricultural and Resource Economics Society.
    4. Kimmich, Christian & Fischbacher, Urs, 2016. "Behavioral determinants of supply chain integration and coexistence," Journal of Forest Economics, Elsevier, vol. 25(C), pages 55-77.
    5. Sauter, Philipp A. & Mußhoff, Oliver & Möhring, Bernhard & Wilhelm, Stefan, 2016. "Faustmann vs. real options theory – An experimental investigation of foresters’ harvesting decisions," Journal of Forest Economics, Elsevier, vol. 24(C), pages 1-20.
    6. Sotirov, Metodi & Sallnäs, Ola & Eriksson, Ljusk Ola, 2019. "Forest owner behavioral models, policy changes, and forest management. An agent-based framework for studying the provision of forest ecosystem goods and services at the landscape level," Forest Policy and Economics, Elsevier, vol. 103(C), pages 79-89.
    7. Sauter, Philipp & Hermann, Daniel & Mußhoff, Oliver, 2015. "Risk attitudes of foresters, farmers and students: An experimental multimethod comparison," DARE Discussion Papers 1514, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    8. M. Brunette & S. Couture & J. Foncel & S. Garcia, 2020. "The decision to insure against forest fire risk: an econometric analysis combining hypothetical real data," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(1), pages 111-133, January.
    9. Michels, Marius & Wever, Hendrik & Musshoff, Oliver, 2023. "Drones take flight in forests: Uncovering the ‘tree’-mendous potential and ‘timber’-rific challenges for German forest managers by applying the technology acceptance model," Forest Policy and Economics, Elsevier, vol. 157(C).
    10. Mozgeris, Gintautas & Brukas, Vilis & Stanislovaitis, Andrius & Kavaliauskas, Marius & Palicinas, Michailas, 2017. "Owner mapping for forest scenario modelling — A Lithuanian case study," Forest Policy and Economics, Elsevier, vol. 85(P2), pages 235-244.
    11. Marielle Brunette & Robin Bourke & Marc Hanewinkel & Rasoul Yousefpour, 2018. "Adaptation to climate change in forestry: a multiple correspondence analysis (MCA)," Post-Print hal-02620990, HAL.
    12. Sauter, Philipp A. & Hermann, Daniel & Mußhoff, Oliver, 2018. "Are foresters really risk-averse? A multi-method analysis and a cross-occupational comparison," Forest Policy and Economics, Elsevier, vol. 95(C), pages 37-45.
    13. Sauter, Philipp & Hermann, Daniel & Musshoff, Oliver, 2016. "Risk attitudes of farmers, foresters and students: An experimental multimethod comparison," 2016 Conference (60th), February 2-5, 2016, Canberra, Australia 235515, Australian Agricultural and Resource Economics Society.
    14. Sauter, Philipp A. & Möllmann, Torsten B. & Anastassiadis, Friederike & Mußhoff, Oliver & Möhring, Bernhard, 2016. "To insure or not to insure? Analysis of foresters' willingness-to-pay for fire and storm insurance," Forest Policy and Economics, Elsevier, vol. 73(C), pages 78-89.

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