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| Watts, Myles J.; Shimshack, Jay P.; LaFrance, Jeffrey T.. |
| Livestock grazing on public lands continues to be a source of intense conflict and debate. We analyze this problem using a dynamic game. Low grazing fees let ranchers capture more rent from grazing. This increases the incentive to comply with federally mandated regulations. Optimal grazing contracts therefore include grazing fees that are lower than competitive private rates. The optimal policy also includes random monitoring to prevent strategic learning by cheating ranchers and avoid wasteful efforts to disguise noncompliant behavior. Finally, an optimal policy includes a penalty for cheating beyond terminating the lease. This penalty must be large enough that the rancher who would profit the most from cheating experiences a negative expected net return. |
| Tipo: Working or Discussion Paper |
Palavras-chave: Renewable resources; Public lands grazing policy; Optimal contracts; Land Economics/Use. |
| Ano: 2006 |
URL: http://purl.umn.edu/7151 |
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| Menzies, Gordon Douglas. |
| A creditor can balance debt recovery and humanitarian goals within an optimal contract framework. The approach ties together two strands of literature that assume either creditor self-interest (Krugman 1988) or benevolence (Addison and Murshed 2003). A reservation utility for the debtor serves as a metric for creditor benevolence. The optimal hyper-incentive contract recognizes that the attainment of health, education, peace and the appeasement of foreign creditors may be conflicting goals. Forgiving debt to motivate paying creditors may therefore have the unintended effect of reducing effort devoted to winning a civil war. For a given reservation utility for the debtor, aid directly targeted towards ending a civil war is a substitute for debt forgiveness. |
| Tipo: Journal Article |
Palavras-chave: Debt overhang; Debt forgiveness; Optimal contracts; Civil war; Exports; Financial Economics; F34; F35. |
| Ano: 2006 |
URL: http://purl.umn.edu/50148 |
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