This thesis studies the markets selections and total welfare of poor farmers under three government information provision policies given that farmers are heterogeneous and price takers. The farmers need to select markets in the both two periods where there is no markets’ signals in the first period while the signals realize in the second period. Additionally, the farmers maximize their own profits by considering the movements of the other farmers and the higher transportation cost in the second period if they decide to wait for the signals. We first prove the structure of the market selection decisions at the end of the first period. Based on the reasonable structure that the middle part will wait for the realization of the signals while the rest moving to the near market before...[ Read more ]

This thesis studies the markets selections and total welfare of poor farmers under three government information provision policies given that farmers are heterogeneous and price takers. The farmers need to select markets in the both two periods where there is no markets’ signals in the first period while the signals realize in the second period. Additionally, the farmers maximize their own profits by considering the movements of the other farmers and the higher transportation cost in the second period if they decide to wait for the signals. We first prove the structure of the market selection decisions at the end of the first period. Based on the reasonable structure that the middle part will wait for the realization of the signals while the rest moving to the near market before that, we find that the farmers’expected total profit is always better off under the Centralized Policy than the Decentralized one. What’s more, the Full Information Policy leads to some waste of the social resources comparing to the General Policy. Thus, to maximize the expected total welfare, the government should control the number of switching farmers. Finally, we analyse the correlations among the factors numerically.