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Moral Hazard And Bt Corn Refuge

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  • Mitchell, Paul D.
  • Zhu, En (John)

Abstract

Using a principal-agent model, we find the optimal subsidy contract that induces grower compliance with Bt corn refuge requirements for managing insect resistance when asymmetric information exists concerning grower behavior. The optimal contract balances the cost of monitoring and the benefit of reducing the likelihood of insect resistance.

Suggested Citation

  • Mitchell, Paul D. & Zhu, En (John), 2003. "Moral Hazard And Bt Corn Refuge," 2003 Annual meeting, July 27-30, Montreal, Canada 22113, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22113
    DOI: 10.22004/ag.econ.22113
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    References listed on IDEAS

    as
    1. Terrance M. Hurley & Paul D. Mitchell & Marlin E. Rice, 2004. "Risk and the Value of Bt Corn," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 345-358.
    2. Coble, Keith H. & Heifner, Richard G. & Zuniga, Manuel, 2000. "Implications Of Crop Yield And Revenue Insurance For Producer Hedging," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-21, December.
    3. Babcock, Bruce A. & Choi, E. Kwan & Feinerman, Eli, 1993. "Risk And Probability Premiums For Cara Utility Functions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(01), pages 1-8, July.
    4. Jeffrey Hyde & Marshall A. Martin & Paul V. Preckel & C. Richard Edwards, 1999. "The Economics of Bt Corn: Valuing Protection from the European Corn Borer," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 21(2), pages 442-454.
    5. Atanu Saha & C. Richard Shumway & Arthur Havenner, 1997. "The Economics and Econometrics of Damage Control," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 773-785.
    6. Gershon Feder, 1979. "Pesticides, Information, and Pest Management under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(1), pages 97-103.
    7. David A. Hennessy & Bruce A. Babcock & Dermot J. Hayes, 1997. "Budgetary and Producer Welfare Effects of Revenue Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 1024-1034.
    8. Carlson, Gerald A. & Zilberman, David & Miranowski, John, 1993. "Agricultural and Resource Economics," Staff General Research Papers Archive 11104, Iowa State University, Department of Economics.
    9. Mitchell, Paul D. & Hurley, Terrance M. & Babcock, Bruce A. & Hellmich, Richard L., 2002. "Insuring The Stewardship Of Bt Corn: 'A Carrot' Versus 'A Stick'," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(2), pages 1-16, December.
    10. Hurley, Terrance M. & Babcock, Bruce A. & Hellmich, Richard L., 2001. "Bt Corn And Insect Resistance: An Economic Assessment Of Refuges," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), pages 1-19, July.
    11. Bruce A. Babcock & Chad E. Hart & Dermot J. Hayes, 2002. "Crop Insurance Rates and the Laws of Probability," Center for Agricultural and Rural Development (CARD) Publications 02-wp298, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    12. J. K. Horowitz & E. Lichtenberg, 1994. "Risk‐Reducing And Risk‐Increasing Effects Of Pesticides," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(1), pages 82-89, January.
    13. David A. Hennessy, 1997. "Damage Control and Increasing Returns: Further Results," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 786-791.
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