Using Both Sociological And Economic Incentives To Reduce Moral Hazard
Economists tend to focus on monetary incentives. In the model developed here, both sociological and economic incentives are used to diminish the apparent moral hazard problem existing in commodity grading. Training that promotes graders' response to sociological incentives is shown to increase expected benefits. The model suggests that this training be increased up to the point where the marginal benefit due to training equals its marginal cost. It may be more economical to influence the grader's behavior by creating cognitive dissonance through training and rules rather than by using economic incentives alone.
|Date of creation:||2003|
|Contact details of provider:|| Web page: http://www.saea.org/|
More information through EDIRC
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.:
- David A. Hennessy & Thomas I. Wahl, 1997.
"Discount Schedules and Grower Incentives in Grain Marketing,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 79(3), pages 888-901.
- Hennessy, David A. & Wahl, Thomas I., 1997. "Discount Schedules and Grower Incentives in Grain Marketing," Staff General Research Papers Archive 10672, Iowa State University, Department of Economics.
- Allen, Douglas W. & Lueck, Dean, 1999. "Searching For Ratchet Effects In Agricultural Contracts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(02), December.
- Edward Simpson Prescott, 1999. "A primer on moral-hazard models," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 47-78. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ags:saeatm:35009. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.