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Firstly, higher market transparency increases farmers' expected profits as long as the cost function is convex.
However, higher market transparency does not increase agricultural production levels per se.
Higher market transparency then affects the farmer's production decision in two opposing ways.
In that case, higher market transparency reduces the expected volume of agricultural supply.
Due to these opposing effects, the overall impact of higher market transparency on farmers' ex ante expected utility remains ambiguous.
Now we characterize the impact of higher market transparency on the volume of production in terms of the curvature of the marginal cost function.
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We find that a higher degree of market transparency leads to higher expected profits but does not increase agricultural production levels per se.
Its evolution will be powered by radically greater market transparency.
Market transparency.
Next we define our notion of market transparency.
According to their research, market transparency also plays an important role in the auction market efficiency.
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