CASH MARKET OR CONTRACT? HOW TECHNOLOGY AND CONSUMER DEMAND INFLUENCE THE DECISION

Carolyn Dimitri () and Edward Jaenicke

No 20723, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The use of contracts for producing and marketing agricultural commodities has become nearly universal in some sectors. Two factors are most frequently cited as being responsible for the use of agricultural contracts. The first, a demand-side factor, is the development of strong consumer preferences for specific qualities. The second, a supply-side factor, is technological change. In this paper, we use a principal agent framework to model how consumer demand and technology enter into a firm's decision to use contracts or the cash market.

Keywords: Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Pages: 23
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20723

DOI: 10.22004/ag.econ.20723

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