At sales out breeding bulls, prospective buyers have strong incentives to undertake presale measurement activities. To reduce these transaction costs, sellers often provide information on sale bulls. We examine the information content of two measures of the expected performance of the bulls and find that within a given herd, older, simpler measures of performance contain more information about prices (from buyers' perspectives) than newer, more sophisticated measures known as expected progeny differences, or EPDs. We also find, however, that buyers appear to pay considerable attention to annual changes in herd-average EPD values when comparing animals from different sellers. Copyright 2001, Oxford University Press.

The application of manure phosphorus at rates above crop uptake has resulted in water pollution for some regions. In response, new manure management standards will require some farms to match manure phosphorus application rates with crop uptake. For some regions, this will lead to more crop acres and a shift toward crops with greater nutrient uptake, both of which will increase nitrogen runoff. The greater nitrogen runoff could offset the lower phosphorus runoff to result in greater water pollution. This demonstrates the law of unintended consequences, which results when policy does not consider how economic agents respond to incentives.

No abstract