Wu, Steven Y.; Rosch, Stephanie D.; Alexander, Corinne E.; … - Agricultural and Applied Economics Association - AAEA - 2010
We present designs for optimal contracts to solve the investment hold-up problem for perennial crops for the biofuel industry. A fixed-price contract is ex-ante efficient but renegotiation-proof for a limited range of discount parameters. A perfectly- indexed contract is both renegotiation-proof...