RISK AND MARKET PARTICIPANT BEHAVIOR IN THE US SLAUGHTER-CATTLE MARKET

Incomplete information generates uncertainty for market participants i n the slaughter-cattle market. Buyer and seller behavior in the presen ce of that uncertainty is examined. Statistically significant risk pre miums are charged by packers when buying slaughter eagle on either a l ive- or dressed-weight basis compared to buying on a grade-and-yield b asis. Pratt-Arrow risk-aversion coefficients are calculated for buyers and these remain constant over all marketing methods. Sellers market cattle under all three marketing methods, suggesting producers' attitu des toward risk (risk-aversion coefficients) vary.