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| Olesen, Henrik Ballebye; Olsen, Rene H.. |
| 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 insurance problem is that of minimizing the cost of risk through risk minimization and risk sharing. The issue of discrimination is that of paying agents with different skills sufficiently to participate, without overcompensating other agents. We show how the principal may benefit from a strategic division of the agents into different tournaments or groups. The optimal number of groups from the principal's point of view is determined through a trade-off between moral... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Agribusiness. |
| Ano: 2001 |
URL: http://purl.umn.edu/24183 |
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| Bogetoft, Peter; Olesen, Henrik Ballebye. |
| Modern agricultural marketing cooperatives must implement farm-level differentiation to meet requirements from high-quality market segments, e.g. consumers focusing on animal welfare. This makes the cooperatives internally heterogeneous and increases the influence costs. In particular, the marketing of specialty, high-quality products is a controversial issue for cooperatives, because different producer groups have different interests. The standard producers, who normally hold the majority vote in the cooperatives, are reluctant to promote the sale of specialty products and hereby reduce the bargaining power of the specialty producers. We explore these arguments in a formal model. |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Agribusiness. |
| Ano: 2003 |
URL: http://purl.umn.edu/22190 |
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| Olesen, Henrik Ballebye. |
| 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 sharing between the farmers. General problems from the contract theory such as hold up, moral hazard, risk sharing and screening are analyzed. The paper illustrates the tradeoffs between these problems in design of contracts. By negotiating the contract through a pea-growers association, the farmers gain some bargaining power. Thus the farmers can ensure that Danisco Foods uses only one contract for all farmers. This paper analyzes the consequences of the farmers'... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Contract theory; Coordination; Incentives; Risk sharing; Agribusiness. |
| Ano: 2001 |
URL: http://purl.umn.edu/24200 |
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