A Game Theoretical Model of Land Contract Choice

Américo Mendes ()

No 1, Working Papers de Economia (Economics Working Papers) from Católica Porto Business School, Universidade Católica Portuguesa

Abstract: In most of the land tenancy literature the type of contract is exogenous. Also even though these contracts vary a lot among farms, between regions and over time, the theoretical literature has not always acknowledged this idiosyncrasy. Building on the strategic bargaining theory initiated by Rubinstein, this model not only makes the type of contract endogenous, but also provides the surplus sharing rules and the conditions giving rise to each type of contract, showing how the type and terms of the contract are tailored to fit the characteristics of the parties and their economic environment. Pairwise bargaining is embedded into a market context by putting “competitive pressure” on the players through the opportunity they have to break up bargaining and look for alternative partners. Because of this threat of opting out, the outcome of the bargaining process depends not only on the characteristics of the players, but also on events outside their match and the information they have about them. The model departs from price-taking assumptions. Type and terms of the contract result from negotiation and are shaped by the “relative bargaining powers” of the players whose relevant components are identified in a precise way in the model.

Keywords: land tenancy; sharecropping; land contract choice; game theory (search for similar items in EconPapers)
JEL-codes: C7 D8 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2007-04
New Economics Papers: this item is included in nep-agr and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.feg.porto.ucp.pt/docentes/repec/WP/0120 ... ntract%20choice2.pdf First version (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.feg.porto.ucp.pt:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cap:wpaper:012007

Access Statistics for this paper

More papers in Working Papers de Economia (Economics Working Papers) from Católica Porto Business School, Universidade Católica Portuguesa Contact information at EDIRC.
Bibliographic data for series maintained by Ricardo Goncalves ().