A theory of sharecropping: the role of price behavior and imperfect competition

Debapriya Sen

MPRA Paper from University Library of Munich, Germany

Abstract: 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.

Keywords: Sharecropping; price variation; imperfect competition; interlinkage; the epsilon-agent (search for similar items in EconPapers)
JEL-codes: D02 D23 J43 O12 O17 Q15 (search for similar items in EconPapers)
Date: 2009-12-04
New Economics Papers: this item is included in nep-com and nep-mic
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Related works:
Journal Article: A theory of sharecropping: The role of price behavior and imperfect competition (2011)
Working Paper: A theory of sharecropping: the role of price behavior and imperfect competition (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19021

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