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Bargaining Power and Efficiency in Principal-Agent Relationships

Quiggin, John; Chambers, R. G

Description

Agrarian contracts such as sharecropping are frequently modelled as principal agent relationships. Although it is commonly assumed that the principal has complete freedom to design the contract, the problem formulation in much of the principal agent literature presumes that the sharecropping contract is constrained-Paretoefficient. In the present paper, we consider the implications of a richer specification of the choices available to peasants. In particular, we consider the entire spectrum of...[Show more]

dc.contributor.authorQuiggin, John
dc.contributor.authorChambers, R. G
dc.date.accessioned2002-05-14
dc.date.accessioned2004-05-19T09:49:26Z
dc.date.accessioned2011-01-05T08:43:08Z
dc.date.available2004-05-19T09:49:26Z
dc.date.available2011-01-05T08:43:08Z
dc.date.created2001
dc.identifier.urihttp://hdl.handle.net/1885/40525
dc.identifier.urihttp://digitalcollections.anu.edu.au/handle/1885/40525
dc.description.abstractAgrarian contracts such as sharecropping are frequently modelled as principal agent relationships. Although it is commonly assumed that the principal has complete freedom to design the contract, the problem formulation in much of the principal agent literature presumes that the sharecropping contract is constrained-Paretoefficient. In the present paper, we consider the implications of a richer specification of the choices available to peasants. In particular, we consider the entire spectrum of possible power differentials in the contracting relationship between landlords and peasants. Our central result is that the agent can exploit information asymmetries to offset the bargaining power of the principal, but that this process is socially costly.
dc.format.extent1168704 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_AU
dc.subjectprincipal-agent relationships
dc.subjectbargaining power
dc.subjectstate-contigent production
dc.subjectagrarian contracts
dc.titleBargaining Power and Efficiency in Principal-Agent Relationships
dc.typeWorking/Technical Paper
local.description.refereedno
local.identifier.citationmonthoct
local.identifier.citationyear2001
local.identifier.eprintid356
local.rights.ispublishedyes
dc.date.issued2001
local.contributor.affiliationANU
local.contributor.affiliationSchool of Economics
local.citationWorking Papers in Economics and Econometrics No. 413
CollectionsANU Research Publications

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