Spot market versus incentive contract
- Fernández-Olmos, M. 1
- Marín Vinuesa, L.M. 2
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1
Universidad de Zaragoza
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2
Universidad de La Rioja
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ISSN: 1594-5685
Argitalpen urtea: 2009
Alea: 8
Zenbakia: 3
Orrialdeak: 12-20
Mota: Artikulua
Beste argitalpen batzuk: New Medit
Laburpena
This paper attempts to develop a consistent theory for the choice of performance contracts in agriculture by analyzing the trade-off between quantity and quality and the presence of competence and uncertainty on the basis of the expected utility theory. This theory is able to explain many contract-related issues, such as why the performance contract can be optimal even providing lesser quantity and quality than the spot market and why a trade-off between processorś and consumeŕ interests about mechanism choice can exist, utilizing a simulation exercise.