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Symbol | Description |
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| The farmer’s agricultural investment level (a decision variable), and |
| The guaranteed purchase price decided by the company (a decision variable) |
| The random purchase price in the random demand market (a random variable) |
| The PDF function of the random variable |
| The CDF function of the random variable |
| The farmer’s reservation price (an exogenous variable) |
| The company’s selling price (an exogenous variable) |
| The average amount of rainfall during the production of agricultural products |
| The lower bound of the rainfall suitable for the growth of the crop |
| The upper bound of the rainfall suitable for the growth of the crop |
| The lower bound of disastrous rainfall experienced during the growth of the crop |
| The upper bound of disastrous rainfall experienced during the growth of the crop |
| The upper bound of rainfall that may occur in nature |
| The output of agricultural product |
| The farmer’s production cost |
| The random demand function (a random variable) |
| The PDF function of the random variable |
| The CDF function of the random variable |
| The expected demand |
| The unit cost of shortage |
| The expected profit of the farmer in decentralized system |
| The expected profit of the company in decentralized system |
| The lower bound of rainfall index where payments begin |
| The upper bound of rainfall index where payments end |
| The upper bound of unit insurance compensation |
| The unit insurance premiums |
| The total amount of insurance purchased by the farmer |
| The fraction of the supply chain revenue to the farmer |
| The risk transfer fee |
| The expected profit of the farmer in decentralized system under weather index insurance contract |
| The expected profit of the company in decentralized system under weather index insurance contract |
| The total expected profit in the centralized system |
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