Sen, Debapriya (2009): A theory of sharecropping: the role of price behavior and imperfect competition.
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This paper proposes a theory of sharecropping on the basis of price behavior in agriculture and imperfectly competitive nature of rural product markets. We consider a contractual setting between one landlord and one tenant with seasonal variation of price, where the tenant receives a low price for his output while the landlord can sell his output at a higher price, and show the superiority of sharecropping over fixed rental contracts. Then we consider more general interlinked contracts to show that there are multiple optimal interlinked contracts. Finally, proposing an equilibrium refinement that incorporates imperfect competition in the rural product market, it is shown that the unique contract that is robust to this refinement results in sharecropping.
|Item Type:||MPRA Paper|
|Original Title:||A theory of sharecropping: the role of price behavior and imperfect competition|
|Keywords:||Sharecropping, price variation, imperfect competition, interlinkage, the epsilon-agent|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
J - Labor and Demographic Economics > J4 - Particular Labor Markets > J43 - Agricultural Labor Markets
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, and Operations
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q1 - Agriculture > Q15 - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
|Depositing User:||Debapriya Sen|
|Date Deposited:||07. Dec 2009 03:01|
|Last Modified:||22. Feb 2013 17:16|
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