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Theory of Contracts and Agri-Environment Policies: A Budget Restriction Alters Standard Results of Mechanisms Design Theory AgEcon
Christensen, Jan.
Agri-environmental schemes are offered by a regulator to farmers. The farmer is to produce certain environmental goods and gets a pecuniary compensation for doing so. The problem of designing optimal schemes is dealt with using mechanisms design theory. This paper considers the situation where the regulator faces a budget constraint on total payments to farmers. It is shown, that 2 results of standard mechanisms design theory are affected when a budget restriction on total payments is present. 1) The "no distortion at the top rule" does not always hold. 2) It is not always optimal to offer heterogeneous farmers heterogeneous argi-environmental schemes.
Tipo: Conference Paper or Presentation Palavras-chave: Agri-environmental schemes; Mechanisms design; Information Economics; Environmental Economics and Policy; Q28; D82.
Ano: 2002 URL: http://purl.umn.edu/24882
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Lack of Credibility in Food Markets - Driving Medium Quality Food Out of the Market AgEcon
Christensen, Jan; Graversen, Jesper T..
Some food markets are dominated by high quality and standard quality segments, whereas medium quality products are almost absent. A modeling framework with asymmetric information regarding true quality of the products and the resulting lack of consumer confidence is presented. Uncertainty regarding the quality of alleged medium quality products provides certain consumer groups to divert consumptions away from medium quality to either standard or high quality products. These countervailing incentives explain the missing medium quality products. Empirical examples are given to motivate the model.
Tipo: Conference Paper or Presentation Palavras-chave: Adverse selection; Asymmetric information; Consumer behavior; Product differentiation; Uncertainty; Consumer/Household Economics; D11; D82; Q13.
Ano: 2005 URL: http://purl.umn.edu/24539
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