We consider how to organize the processing and marketing of an agricultural product when farming costs are known only by the individual farmers. We show that when marginal costs are un-correlated and the market for final goods is competitive, the socially optimal production levels may be...

The contracts we consider in this paper must solve three problems: moral hazard, insurance and discrimination. The moral hazard problem is that of providing the agents with incentives to perform in a way that maximizes the profit to the principal, when the agent's actions are unobservable. The...

We discuss the design of interactive, internet based benchmarking using parametric (statistical) as well as non-parametric (DEA) models. The user receives benchmarks and improvement potentials. The user is also given the possibility to search different efficiency frontiers and hereby to explore...

On the Danish milk quota exchange each producer can submit a single bid (a quantity and a price limit) only. We demonstrate that this restriction has several distorting effects. First, traders minimise the risk of foregoing profitable trade by submitting their average valuation rather than their...

This paper analyzes a contract between farmers and a large company in the Danish food industry, Danisco Foods. Production of green peas requires a very accurate coordination, which is obtained through centralized decision-making. The contract is based on a tournament system providing risk...

This article discusses models in data envelopment analysis (DEA) relaxing the standard convexity assumptions. The basic model treats mutually incomparable pairs of sets to be generated by a procedure proposed earlier. Each pair consists of a consumption set and a production set of feasible...

A major challenge to legislators, insurance providers and municipalities will be how to manage the reimbursement of health-care on partially open markets under increasing fiscal pressure and an aging population. Although efficiency theoretically can be obtained by private solutions using...

Effective economic regulation demands clear objectives, sound economic reasoning and a careful analysis of the inevitable trade-offs between conflicting societal interests. The key problems are linked to the information asymmetry between the regulator and the regulated firms. Although the market...

In this paper, we suggest that inefficiency may be an indirect, on-the-job compensation to agents in an organization. We show how to use actual production data to reveal the trade-offs between different inefficiencies (slacks). Moreover, we discuss how to use this to improve productivity...