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An Innovative Approach to Introduce Latino and Socially Disadvantaged Farmers to Risk and Uncertainty

Marcelo Siles and Lindon Robison

Summary

This proposal describes a gaming experience that provides Latino and disadvantaged farmers an opportunity to evaluate risky and uncertain outcomes and the benefits and costs of purchasing insurance.

Latino and socially disadvantaged farmers face outcomes that can alter their financial (and emotional) well-being. Sometimes the likelihood of these outcomes is unknown or uncertain. In other cases, risky outcomes can be predicted with known probabilities. Those facing risky and uncertain outcomes can adopt strategies to alter their consequences. One strategy Latino and socially disadvantaged farmers can adopt to alter the consequences of risky and uncertain events is to purchase insurance.

So that Latino and socially disadvantaged farmers can experience responding to risky and uncertain outcomes by purchasing insurance, we have developed a Monopoly-like game. Like Monopoly, our board game has slots around the game board that describe possible outcomes. A random variable is introduced by tossing a dice that selects a player’s outcome. There are two kinds of slots. The first kind describes risky outcomes that provide players with a known amount of money selected by the dice toss. The second kind of slot introduces uncertain outcomes. If a player lands on an uncertain slot, he/she will select a card from a deck of cards that describes a positive or negative uncertain outcome. Prior to tossing one’s die, the player can purchase insurance for a certain cost that will alter the outcomes of an uncertain event. The game provides players with a virtual experience of the advantages and costs of purchasing insurance to mitigate the consequences of risky and uncertain outcomes.

The game is made realistic by defining possible positive and negative outcomes of interest to Latino and disadvantaged farmers. Positive outcomes include higher prices, new markets for farm products, improved production methods, and the discovery of new product varieties with higher yields. Negative outcomes include adverse weather, fires, illness or death, machinery and crop failure and others. Players can mitigate the consequences of possible negative events by purchasing insurance for a known cost. Depending on the participant’s position on the board, the player evaluates his/her risk and uncertainty and the benefits and cost of purchasing insurance before tossing the die. A player’s success is defined by accumulated earnings after five rounds of the game. A player who loses his beginning resources and borrowing potential is eliminated from the game.

Details

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