India’s Agrarian Crisis and Corporate-Led Contract Farming: Socio-economic Implications for Smallholder Producers

The paper discusses India’s agrarian crisis and the role of corporate-led contract farming in addressing these crisis. A two-stage Heckman model was used to explain determinants of participation in contract farming, and whether participation in contract farming affects farm income. The results indicate that contract farming has a positive impact on crop productivity and farm income. The socio-economic factors that influenced participation in contract farming were education, age, farm size, access to institutional credit, source of off-farm income and membership to an organization. Factors related to the likelihood of participation in contract farming slightly differed from the factors affecting farm income.Agrarian crisis, Smallholder producer, Corporate-led contract farming, Agricultural Produce Marketing (APMC) Act, Heckman model, Institutional and Behavioral Economics, Marketing, Research Methods/ Statistical Methods, Q10, Q13,

The Effect of Player Performance on Free Agency Contract Value in Major League Baseball

This study estimates the effect of player performance on free agency contract values in Major League Baseball (MLB). We hypothesize that performance, as measured by Wins Above Replacement (WAR), has a positive effect on the contract value. To test this, we specify and estimate a linear regression for contract value as a function of current and lagged WAR values and other control variables. Using data from 82 major league position players during the 2013 and 2014 seasons, our results indicate that the current and lagged values of WAR have a significant, positive effect on contract value. Among the control variables, the contract length has a significant, positive effect on the contract value. The model is used to predict free agent contract values set during the 2015 off-season. This prediction for 25 players has an average error of 35%, without systematic over-or under-prediction

Mixed contracts for the newsvendor problem with real options

In this paper we consider the newsvendor model with real options. We consider a mixed contract where the retailer can order a combination of q units subject to the conditions in a classical newsvendor contract and Q real options on the same items. We provide a closed form solution to this mixed contract when the demand is discrete and study some of its properties. We also offer an explicit solution for the continuous case. In particular we demonstrate that a mixed contract may be superior to a real option contract when a manufacturer has a bound on how much variance she is willing to accept.Newsvendor model; real options; discrete demand; mixed contract

The valuation effect and determinants of corporate contracting : a thesis presented in partial fulfillment of the requirements for a Master of Business Studies at Massey University, December 2002

This study examined abnormal stock market returns to equity holders around corporate contract announcement that were obtained from Dow Jones & Company, Inc. between January 1, 1990 and December 31, 2000. Of the 7137 contract announcement found, 984 contract winning companies (contractee) and 575 contract giving companies (contractor) were not contaminated by other announcements and have sufficient CRSP data to enter the final sample that was analyzed for excess returns to the contractees. Excess returns were also analyzed for the contractors. The Asymmettic Information Hypothesis and Information Content Hypothesis were used to develop hypotheses that predict contract announcement abnormal returns. The Market Model was used to analyze abnormal returns for both the contractees and contractors. As expected, statistically significant cumulative average excess returns were found for contractee companies, but not for contractor companies. Contractee excess returns were also examined for different industry groups. Also, the international or domestic nature of the contractor is analyzed for differences in abnormal returns. Contrary to expectations, the market reacted with more significant abnormal return for domestic contracting than the international contracting. Finally, cross-sectional regression models are developed to test the statistical significance of variables relative to sample characteristic, firm size, profitability, and information asymmetries of firm. Contractee relative contract size was found to have significant impact on cumulative average abnormal returns. Dummy variables were included in the cross-section model to account for the sequence of the contract and nationality of the contractee and contractor, but they were statistically insignificant to the model. The variables for contractor's firm were also statistically insignificant in effecting abnormal returns for their equity

Contract Duration and the Division of Labor in Agricultural Land Leases

Short-term contracts provide weak incentives for durable input investment if post-contract asset transfer is difficult. Our model shows that when both agents provide inputs, optimal contract length balances weak incentives of one agent against the other. This perspective broadens the existing contract duration literature, which emphasizes the tradeoff between risk sharing and contract costs. We develop hypotheses and test them based on private grazing contracts from the Southern Great Plains. We find broad support for the implications of our model. For example, landowners provide durable land-specific inputs more often under annual versus multiyear contracts.land lease contracts, moral hazard, contract duration, division of labor

Incomplete Contingent Labor Contract, Asymmetric Residual Rights and Authority, and the Theory of the Firm

In the paper the trade-offs among endogenous transaction costs caused by two-sided moral hazard, exogenous monitoring cost, and economies of specialization are specified in a Grossman, Hart and Moore (GHM) model to absorb Maskin and Tirole’s recent critique and Holmstrom and Milgrom’s criticism of the model of incomplete contract. The extended GHM model allowing incomplete contingent labor contract as well complete contingent contract of goods trade is used to explore the implications of structure of ownership and residual rights for the equilibrium network size of division of labor and productivity.theory of the firm, incomplete labor contract, asymmetric authority, two-sided moral hazard, transaction cost, asymmetric residual rights, division of labor, specialization

Factors affecting rework costs in construction

Rework adversely impacts the performance of building projects. In this study, data were analyzed from 788 construction incidents in 40 Spanish building projects to determine the influence of project and managerial characteristics on rework costs. Finally, regression analysis was used to understand the relationship between the contributing factors, and to determine a model for rework prediction.Interestingly, the rework prediction model showed that only the original contract value (OCV) and the project location in relation to the company’s headquarters contribute to the regression model. The Project type, the Type of organization, the Type of contract and the original contract duration (OCD) which represents the magnitude and complexity of a project, were represented by the OCV. This model for rework prediction based on original project conditions enables strategies to be put in place prior to the start of construction, to minimize uncertainties and reduce the impact on project cost and schedule, and thus improve productivity.Peer ReviewedPostprint (author's final draft

Designing effective contracts within the buyer-seller context: a DEMATEL and ANP study

This study examines the factors that contribute to effective contract design within the context of buyer-seller relationship. Research streams on contract factors, supply chain factors, environmental factors, and competitive factors were reviewed to arrive at 18 contract factors. A hybrid model of Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytic Hierarchy Process (ANP) analysed empirical data collected from 17 experts to weight the importance of contract factors. It was found that most important factors are, in order of significance: policies, supplier technology, force majeure, formality, relationship learning, buyer power, legal actions, liquidated damages, supplier power and partnership

Breaking the Economic Barrier of Caching in Cellular Networks: Incentives and Contracts

In this paper, a novel approach for providing incentives for caching in small cell networks (SCNs) is proposed based on the economics framework of contract theory. In this model, a mobile network operator (MNO) designs contracts that will be offered to a number of content providers (CPs) to motivate them to cache their content at the MNO's small base stations (SBSs). A practical model in which information about the traffic generated by the CPs' users is not known to the MNO is considered. Under such asymmetric information, the incentive contract between the MNO and each CP is properly designed so as to determine the amount of allocated storage to the CP and the charged price by the MNO. The contracts are derived by the MNO in a way to maximize the global benefit of the CPs and prevent them from using their private information to manipulate the outcome of the caching process. For this interdependent contract model, the closed-form expressions of the price and the allocated storage space to each CP are derived. This proposed mechanism is shown to satisfy the sufficient and necessary conditions for the feasibility of a contract. Moreover, it is shown that the proposed pricing model is budget balanced, enabling the MNO to cover all the caching expenses via the prices charged to the CPs. Simulation results show that none of the CPs will have an incentive to choose a contract designed for CPs with different traffic loads.Comment: Accepted for publication at Globecom 201

Rethinking Freedom of Contract: A Bankruptcy Paradigm

This Article tests the limits of private contracting by examining what it means to contract about bankruptcy. Bankruptcy law if governed by a statutory code that defines the relationship between debtors and creditors when a debtor enters the bankruptcy regulatory scheme. May debtors and creditors contract in advance to change that relationship? Or would these contracts be Faustian bargains that the state should not enforce? Both courts and scholars are in conflict, yet the answer is critical because it affects not only bankruptcy costs but also the structuring of corporate reorganizations and securitization transactions. I maintain that the threshold question--what freedom should parties or should not be allowed to contractually alter statutory schemes. I then apply those principles to a model of prebankruptcy contracting by taking into account the policies underlying the bankruptcy code and also by analyzing the extent to which, under contract law, externalities should render a contract unenforceable. I conclude that, within defined limits, bankruptcy law should be viewed as default provisions and not as mandatory rules. Finally I show that my model of prebankruptcy contracting can have important applications, not only to making corporate reorganizations and securitizations transactions more efficient but also to understanding when parties should be allowed to contract about statutory schemes generally and when externalities should override freedom of contract