Impact and Stability Analysis of Multi-Period Price Weights on Agricultural Market Supply Decisions——Based on a second-order price-weighted cobweb model
Agricultural price stability is the cornerstone of national food security.Building on the traditional cobweb model,which considers the adjustment of supply and demand in a single period,this paper expands the analysis to the stability of the cobweb model under a second-order price-weighted framework using parametric variables.Specifically,producers make production decisions by taking into account the price levels from the previous two periods.The paper explores how the prices of the previous two periods affect current market supply by examining changes in these parametric variables.The study concludes with a general finding:when greater weight is assigned to the price of the previous period,the stability domain ini-tially increases,then decreases,reaching its maximum when the weight on the previous period's price is set to2/3.Empirical analyses using price and production data for three domestic agricultural products—corn,watermelon,and hogs—demonstrate that the second-order price-weighted cobweb model better explains the dynamics of price and supply in the domestic agricul-tural market.The conclusions of this paper provide insights into agricultural supply behavior considering the prices of the pre-ceding two periods and offer an economic analysis framework for studying supply decisions for perennial crops,which is of great significance for promoting sustainable agricultural development and ensuring food security.
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