DOMESTIC AND INTERNATIONAL AGRICULTURAL POLICY INTERFACES

Agricultural and Food Policy,

DISCUSSION: IMPACT OF FEDERAL FISCAL-MONETARY POLICY ON FARM STRUCTURE

Agricultural Finance,

INCENTIVES AND STANDARDS IN AGENCY CONTRACTS

This paper studies the structure of state-contingent contracts in the presence of moral hazard and multi-tasking. Necessary and sufficient conditions for the presence of multi-tasking to lead to fixed payments instead of incentive schemes are identified. It is shown that the primary determinant of whether multi-tasking leads to higher or lower powered incentives is the role that noncontractible outputs play in helping the agent deal with the production risk associated with the observable and contractible outputs. When the noncontractible outputs are socially undesirable and risk substitutes, standards are never optimal. If the noncontractible outputs are socially desirable, standards are never optimal if the noncontractible outputs play a risk-complementary role.incentives, multi-tasking, agency, risk complementarity, risk substitutability, Resource /Energy Economics and Policy, Risk and Uncertainty, D82, L23, L50,

Generalized Invariant Preferences: Two-parameter Representations of Preferences

In this paper, we generalize the model of Quiggin and Chambers (2004) to allow for ambiguity, and derive conditions, referred to as generalized invariance, under which a two argument representation of preferences may be obtained independent of the existence of a unique probability measure. The first of these two arguments inherits the properties of standard means, namely, that they are upper semi-continuous, translatable and positively linearly homogeneous. But instead of being additive, these generalized means are superadditive. Superadditivity allows for means that are computed (conservatively) with respect to a set of prior probability measures rather than a singleton probability measure. The second argument of the preference structure is a further generalization of the risk index derived in Quiggin and Chambers (2004). It is sublinear in deviations from the generalized mean discussed above.

The state-contingent approach to production under uncertainty

Chambers and Quiggin, claim that the state-contingent approach provides the best way to think about all problems in the economics of un- certainty, including problems of consumer choice, the theory of the firm, and principal?agent relationships. The purpose of this paper is to restate this claim, and to defend it in the light of recent developments in, and applications of, the state-contingent approach.

Bargaining power and efficiency in insurance contracts

Insurance contracts are frequently modelled as principal--agent relationships. Although it is commonly assumed that the principal, in this case the insurer, has complete freedom to design the contract, the problem formulation in much of the principal--agent literature presumes that the contract is constrained-Pareto-efficient. In the present paper, we consider the implications of a richer specification of the choices available to clients. In particular, we consider the entire spectrum of possible power differentials in the contracting relationship between insurers and clients. Our central result is that the agent can exploit information asymmetries to offset the bargaining power of the insurer, but that this process is socially costly.

The state-contingent approach to production under uncertainty

The central claim of this paper is that the state-contingent approach provides the best way to think about all problems in the economics of uncertainty, including problems of consumer choice, the theory of the firm, and principal–agent relationships. This claim is illustrated by recent developments in, and applications of, the state-contingent approach.risk, state-contingent production, uncertainty, Risk and Uncertainty,

A GENERAL, DYNAMIC, SUPPLY-RESPONSE MODEL

Resource /Energy Economics and Policy,

ACCUMULATION AND RENTAL BEHAVIOR IN THE MARKET FOR FARMLAND

A farmerÂ’s choices of tenure and farm size result from a complex interplay of economic factors technology, entrepreneurial ability, and personal preferences. This paper examines the qualitative effects of these factors on tenure and farm size in a dynamic optimization framework. One implication of the theoretical model is that changes in technology should cause systematic differences to be observed between rates of return on farmland and rates earned on comparable long-term assets. This implication is supported by an empirical test.Land Economics/Use,