The Quality-Quantity Trade-off in the Principal-Agent Framework

This paper uses the principal-agent theory to analytically investigate the optimal incentive-based compensation contract that a processor should offer to a grower performing efforts in quantity and quality. In this process, we contribute to the substantive literature on multi-task principal-agent models by analyzing the quality-quantity trade-off and studying the implications of such a relationship in the principal-agent framework. One striking result of these effects is that, under appropriate incentive-based grower’s compensation, the processor may encourage grower’s effort in quality without crowding out grower’s effort in quantity.quality, quantity, trade-off, incentive contract, principal-agent framework, uncertainty, Agribusiness, Agricultural and Food Policy, D86,

Double Sided Moral Hazard and Share Contracts in agriculture

This paper develops a double-sided moral hazard model of share contract in agriculture, with imperfect quality measurement by the agent and the principal, who contribute to the final good quality in terms of production effort and marketing effort respectively. Using this model, we analyse the implications of the share contract for quantity and quality, often ignored in previous analysis. With the help of a simulation exercise, we prove that the outcome-conditioned share generally weakens the agent´s incentive to make effort in quality input. This finding could explain the contractual evidence in some differentiated markets such as the wine market, where bottle-price conditioned contracts are rarely used.share-contract, double moral-hazard, quality, Farm Management,

On the co-existence of spot and contract markets: an analysis of quality

The possible co-existence of spot and contract market that can emerge in the presence of quality issues with a number of growers and processors in each stage is something that has largely remained an open question in the literature. This paper is an attempt to fill this void. We use a straightforward two-stage Cournot oligopoly model with specific demand and cost functions. In the first stage, processors decide simultaneously whether or not to set an incentive contract. The second stage is the stage in which growers choose their levels of quantity and quality based on the industry structure developed in the first stage. With the help of numerical simulations we conducted the study of the equilibrium structures. Our results suggest that for a wide range of number of participants in both markets, participation in both markets constitutes a Nash equilibrium for the model.Marketing,

The yield/quality trade-off and contractual choice

This paper provides an analysis of the choice of governance mechanism in agriculture using an integrated perspective based on agency theory. The main ways of organizing agriculture are compared: spot market and incentive contract. With the analytical development of both models, it is explored that the choice of the optimal mechanism depends on initial conditions such as uncertainty, the risk aversion of the agents or the number of competitors. Moreover, according to the predictions made by the economic literature on agrarian organization, the results support the coexistence of both governance alternatives.Crop Production/Industries,

Quality and governance mode choice: a transaction cost approach to the wine industry

We analyze the relationship between product quality and governance mode choice using the results of a survey of DOC Rioja wineries. Wineries that produce high-quality wines are more likely to vertically integrate than are wineries that produce low-quality wines. Consistent with Transaction Cost Economics, we find evidence that asset specificity and uncertainty are important determinants of vertical integration. Finally, the size of the winery is also an important factor that affects governance mode choice in viticulture.quality, governance mode choice, transaction cost, Industrial Organization,

FABP-2 and PPAR-γ Haplotype as Risk Factors for Dyslipidemia in a Type 2 Diabetes Mellitus Population of Santa Rosa del Conlara, San Luis, Argentina

Introduction: Type 2 Diabetes Mellitus (T2DM) is a complex disorder caused by the interaction between genetic predisposition and environmental factors. Genetics plays an important role on lipid homeostasis. Many genes are involved in the lipid metabolism, such as FABP-2 and PPAR-γ. Aim: To evaluate the association between specific SNPs and haplotypes of the FABP-2 and PPAR-γ genes with T2DM and lipid profile in an Argentinean population. Methods: The FABP-2 (rs1799883) and PPAR-γ (rs1801282) polymorphisms were genotyped and analyzed in association with lipid profile and T2DM, separately and also combined in haplotypes. Results: The frequency of the rare Thr54 allele of the FABP-2 polymorphism in control (0.33) was not different from the frequency in T2DM (0.27), whereas the frequency of the rare Ala12 allele of the PPAR-γ polymorphism in control was different from the frequency in T2DM (0.26 and 0.14, respectively; p = 0.0031). Frequencies of haplotypes for these two single-nucleotide polymorphisms differed significantly in control and T2DM. Haplotype association analysis showed the associations between ThrPro haplotype and TG levels (OR = 2.520; 95% CI = 1.139 - 5.575; p = 0.027) and between ThrPro haplotype and TC and LDL-c levels when compared to AlaPro haplotype (difference = 0.175, 95% CI = 0068 - 0.499, p < 0.0001; difference = 0.052, 95% CI = 0.017 - 0.158, p < 0.0001, respectively). Conclusions: These results from a haplotype analysis show for the first time that genetic combinations of alleles of the FABP-2 and PPAR-γ gene could play a role in the susceptibility to develop dyslipemia in T2DM.Fil: Siewert, Susana Elfrida. Universidad Nacional de San Luis. Facultad de Química, Bioquímica y Farmacia. Departamento de Bioquímica y Ciencias Biológicas. Laboratorio de Diabetes; ArgentinaFil: Olmos Nicotra, Maria Florencia. Universidad Nacional de San Luis. Facultad de Química, Bioquímica y Farmacia. Departamento de Bioquímica y Ciencias Biológicas. Laboratorio de Diabetes; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Gonzalez, Irma Ines. Universidad Nacional de San Luis. Facultad de Química, Bioquímica y Farmacia. Departamento de Bioquímica y Ciencias Biológicas. Laboratorio de Diabetes; ArgentinaFil: Fernandez, Gustavo. Universidad Nacional de San Luis. Facultad de Química, Bioquímica y Farmacia. Departamento de Bioquímica y Ciencias Biológicas. Laboratorio de Diabetes; ArgentinaFil: Ojeda, Marta Susana. Universidad Nacional de San Luis. Facultad de Química, Bioquímica y Farmacia. Departamento de Bioquímica y Ciencias Biológicas. Laboratorio de Diabetes; Argentin

The Quality-Quantity Trade-off in the Principal-Agent Framework

This paper uses the principal-agent theory to analytically investigate the optimal incentive-based compensation contract that a processor should offer to a grower performing efforts in quantity and quality. In this process, we contribute to the substantive literature on multi-task principal-agent models by analyzing the quality-quantity trade-off and studying the implications of such a relationship in the principal-agent framework. One striking result of these effects is that, under appropriate incentive-based grower’s compensation, the processor may encourage grower’s effort in quality without crowding out grower’s effort in quantity

Costes de transacción e integración vertical: una aplicación al sector de denominación de origen calificada Rioja

El presente trabajo desarrolla y comprueba empíricamente un modelo de integración vertical de la primera etapa de la cadena de valor del vino, la viticultura. El modelo, derivado del análisis de costes de transacción, desarrollado principalmente por Williamson, se formula como una función tobit que se estima con datos de la industria del vino en la denominación de origen calificada (DOC) de Rioja. También se ha establecido la naturaleza de la relación entre la calidad del producto y la integración vertical. De acuerdo con la teoría de los costes de transacción, la integración vertical está positivamente relacionada con la especificidad y con la incertidumbre. Nuestros resultados también encuentran que el tamaño de la bodega es una variable a considerar en la decisión de fabricar o comprar. Como se esperaba, nuestros resultados sugieren que una mayor integración vertical está asociada con una mayor calidad del producto

On the co-existence of spot and contract markets: an analysis of quality

The possible co-existence of spot and contract market that can emerge in the presence of quality issues with a number of growers and processors in each stage is something that has largely remained an open question in the literature. This paper is an attempt to fill this void. We use a straightforward two-stage Cournot oligopoly model with specific demand and cost functions. In the first stage, processors decide simultaneously whether or not to set an incentive contract. The second stage is the stage in which growers choose their levels of quantity and quality based on the industry structure developed in the first stage. With the help of numerical simulations we conducted the study of the equilibrium structures. Our results suggest that for a wide range of number of participants in both markets, participation in both markets constitutes a Nash equilibrium for the model

Double Sided Moral Hazard and Share Contracts in agriculture

This paper develops a double-sided moral hazard model of share contract in agriculture, with imperfect quality measurement by the agent and the principal, who contribute to the final good quality in terms of production effort and marketing effort respectively. Using this model, we analyse the implications of the share contract for quantity and quality, often ignored in previous analysis. With the help of a simulation exercise, we prove that the outcome-conditioned share generally weakens the agent´s incentive to make effort in quality input. This finding could explain the contractual evidence in some differentiated markets such as the wine market, where bottle-price conditioned contracts are rarely used