Contract theory and implications for perennial energy crop contracting
This article provides an overview of modern contract theory and discusses the implications of the theory for contracting for perennial dedicated energy crops. We discuss some of the unique challenges of contracting for dedicated energy crops used for the production of advanced biofuels and survey some of the relevant concepts and research from the contract theory literature to address these challenges. We focus primarily on the “mechanism design” or “complete contracts” approach to contracting, which involves optimizing some objective function (e.g. profits, costs, etc.) with respect to contract terms, subject to important incentive constraints. The solution to these optimization problems typically highlight important tradeoffs that a contract designer needs to consider in order to maximize profits and/or minimize costs.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Battaglini, Marco, 2005.
"Optimality and Renegotiation in Dynamic Contracting,"
CEPR Discussion Papers
5014, C.E.P.R. Discussion Papers.
- Battaglini, Marco, 2007. "Optimality and renegotiation in dynamic contracting," Games and Economic Behavior, Elsevier, vol. 60(2), pages 213-246, August.
- Eric Maskin & John Riley, 1984. "Monopoly with Incomplete Information," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 171-196, Summer.
- Epplin, Francis M. & Clark, Christopher D. & Roberts, Roland K. & Hwang, Seonghuyk, 2007. "AJAE Appendix: Challenges to the Development of a Dedicated Energy Crop," American Journal of Agricultural Economics Appendices, Agricultural and Applied Economics Association, vol. 89(5), December.
- Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
- Grossman, Sanford J & Hart, Oliver D, 1983.
"An Analysis of the Principal-Agent Problem,"
Econometric Society, vol. 51(1), pages 7-45, January.
- Sanford J Grossman & Oliver D Hart, 2001. "An Analysis of the Principal-Agent Problem," Levine's Working Paper Archive 391749000000000339, David K. Levine.
- Sanford Grossman & Oliver Hart, . "An Analysis of the Principal-Agent Problem," Rodney L. White Center for Financial Research Working Papers 15-80, Wharton School Rodney L. White Center for Financial Research.
- MacLeod, W Bentley & Malcomson, James M, 1989.
"Implicit Contracts, Incentive Compatibility, and Involuntary Unemployment,"
Econometric Society, vol. 57(2), pages 447-80, March.
- W. Bentley MacLeod & James M. Malcomson, 1986. "Implicit Contracts, Incentive Compatibility, and Involuntary Unemployment," Working Papers 585, Queen's University, Department of Economics.
- Mathias Dewatripont, 1989. "Renegotiation and Information Revelation Over Time: The Case of Optimal Labor Contracts," The Quarterly Journal of Economics, Oxford University Press, vol. 104(3), pages 589-619.
- Helmut Bester & Roland Strausz, .
"Contracting with Imperfect Commitment and Noisy Communication,"
017, Departmental Working Papers.
- Bester, Helmut & Strausz, Roland, 2007. "Contracting with imperfect commitment and noisy communication," Journal of Economic Theory, Elsevier, vol. 136(1), pages 236-259, September.
- Bester, Helmut & Strausz, Roland, 2003. "Contracting with Imperfect Commitment and Noisy Communication," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 2, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Jonathan Levin, 2003.
"Relational Incentive Contracts,"
American Economic Review,
American Economic Association, vol. 93(3), pages 835-857, June.
- Eric Maskin, 2001.
"On Indescribable Contingencies and Incomplete Contracts,"
Economics Working Papers
0008, Institute for Advanced Study, School of Social Science.
- Maskin, Eric, 2002. "On indescribable contingencies and incomplete contracts," European Economic Review, Elsevier, vol. 46(4-5), pages 725-733, May.
- Aaron S. Edlin & Alan Schwartz, 2003. "Optimal Penalties in Contracts," Law and Economics 0303002, EconWPA.
- González, Patrick, 2002.
"Investment and Screening under Asymmetric Endogenous Information,"
Cahiers de recherche
0204, Université Laval - Département d'économique.
- Patrick Gonzàlez, 2004. "Investment and Screening Under Asymmetric Endogenous Information," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 502-519, Autumn.
- Gonzalez, Patrick, 2002. "Investment and Screening under Asymmetric Endogenous Information," Cahiers de recherche 0201, GREEN.
- Jerry W. Liu & Mark J. Browne, 2007. "First-Best Equilibrium in Insurance Markets With Transaction Costs and Heterogeneity," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 74(4), pages 739-760.
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- Maskin, Eric & Tirole, Jean, 1992. "The Principal-Agent Relationship with an Informed Principal, II: Common Values," Econometrica, Econometric Society, vol. 60(1), pages 1-42, January.
- Oliver Hart & John Moore, 1998.
"Foundations of Incomplete Contracts,"
NBER Working Papers
6726, National Bureau of Economic Research, Inc.
- Oliver Hart & John Moore, 1998. "Foundations of Incomplete Contracts," Harvard Institute of Economic Research Working Papers 1846, Harvard - Institute of Economic Research.
- Oliver Hart & John Moore, 1998. "Foundations of incomplete contracts," LSE Research Online Documents on Economics 19354, London School of Economics and Political Science, LSE Library.
- Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
- Francis M. Epplin & Christopher D. Clark & Roland K. Roberts & Seonghuyk Hwang, 2007. "Challenges to the Development of a Dedicated Energy Crop," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(5), pages 1296-1302.
- Mathias Dewatripont, 1989. "Renegotiation and information revelation over time: the case of optimal labor contacts," ULB Institutional Repository 2013/9573, ULB -- Universite Libre de Bruxelles.
- Sarah C. Brechbill & Wallace E. Tyner, 2008. "The Economics Of Biomass Collection,Transportation, And Supply To Indiana Cellulosic And Electric Utility Facilities," Working Papers 08-03, Purdue University, College of Agriculture, Department of Agricultural Economics.
- Coyle, William T., 2010. "Next-Generation Biofuels: Near-Term Challenges and Implications for Agriculture," Amber Waves, United States Department of Agriculture, Economic Research Service, June.
- Wu, Steven Y. & Roe, Brian E., 2007. "Discretionary Latitude and Relational Contracting," IZA Discussion Papers 2879, Institute for the Study of Labor (IZA).
- Edlin, Aaron S., 2003. "Optimal Penalties in Contracts," Berkeley Olin Program in Law & Economics, Working Paper Series qt2w81s277, Berkeley Olin Program in Law & Economics.
- Brechbill, Sarah C. & Tyner, Wallace E. & Ileleji, Klein E., 2008. "The economics of biomass collection and transportation and its supply to Indiana cellulosic and electric utility facilities," Transition to a Bio Economy Conferences, Risk, Infrastructure and Industry Evolution Conference, June 24-25, 2008, Berkeley, California 48732, Farm Foundation.
- Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:34:y:2012:i:4:p:970-979. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.