Profit Maximization of Cattle Fattening Breed Based on Characteristics of Producers: an Application of Game Theory

Abstract

The major purpose of this study was to determine the cattle fattening breed, which maximizes the net profit for the producers under risks and uncertainties based on different characteristics of producers. The monthly data of 21 bullocks consisted of 7 Holstein, 7 PiedmonxHolstain and 7 LimuzinxHolstein cross-breed cattle fattened in closed tie-stall experiment barns of Aegean Agricultural Research Institute, Izmir, Turkey were used in the study. The games were constructed based on the net profit per cattle obtained in the 5th month of fattening where the highest total profit was obtained. Maximaks, Wald, Regret, Hurwicz, Utility and Laplace Criterions of Game Theory were used. The Maximaks, Regret, Hurwics and Laplace Criterions showed that the best breed was Limuzin for the producers in terms of net profit per cattle. According, the results of Wald and Utility Criterions of Game Theory, the optimal breed was Piedmont. Holstein breed was not compatible with any criterions used in this study. Since, the highest net profit per cattle ($ 588.33) is obtained from Limuzin breed by applying Maximaks Criterion, we strongly recommend this breed for optimistic producers. However, the characteristics of producers will determine which criterion to apply to choose the best breed.