Incentives, Information Systems, and Competition
We investigate how different competitive regimes affect the ability to provide incentives based on noisy information systems. The set-up involves multiple producers and processors in the presence of moral hazard and adverse selection. Reduced competition may facilitate incentive provision by allowing more high-powered incentives. This may rationalize both vertical and horizontal integration as seen in many agricultural markets with uncertain quality grading. On the other hand, if trading terms are settled before the information is observed, a noisy information system may suffice to give proper incentives. This may rationalize the use of long-term conditional price contracts in the trading of many agricultural products. Copyright 2003, Oxford University Press.
Year of publication: |
2003
|
---|---|
Authors: | Bogetoft, Peter ; Olesen, Henrik Ballebye |
Published in: |
American Journal of Agricultural Economics. - Agricultural and Applied Economics Association - AAEA. - Vol. 85.2003, 1, p. 234-247
|
Publisher: |
Agricultural and Applied Economics Association - AAEA |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
INFLUENCE COSTS IN HETEROGENEOUS COOPERATIVES: A FORMAL MODEL OF SALES DISTORTION
Bogetoft, Peter, (2003)
-
Quality Incentives and Supply Chains: Managing Salmonella in Pork Production
Bogetoft, Peter, (2004)
-
The single-bid restriction on milk quota exchanges
Bogetoft, Peter, (2003)
- More ...