The (Im)Possibility of Reverse Share Tenancy

Marc Bellemare

MPRA Paper from University Library of Munich, Germany

Abstract: Under the assumption that the landlord is risk-neutral and the tenant is risk-averse, sharecropping is second-best in that it trades off risk sharing and incentives. Many, however, have reported instances of reverse share tenancy, or sharecropping in which the landlord is considerably poorer than the tenant. This note shows that reverse share tenancy is impossible under the canonical Stiglitzian model of sharecropping but becomes possible if and only if (i) both the landlord and the tenant can be assumed risk-averse; or (ii) there exist significant transactions costs making sharecropping more desirable than either a wage or fixed rent contract.

Keywords: Sharecropping; Reverse Share Tenancy; Transactions Cost (search for similar items in EconPapers)
JEL-codes: D23 D86 O12 Q12 (search for similar items in EconPapers)
Date: 2009-12-04
New Economics Papers: this item is included in nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:23681

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