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Høgskolen i Vestfolds skriftserie : utgivelser
i 2001
Jon Reiersen:
Tønsberg: Høgskolen
i Vestfold, 2001.Notat 10/2001 This paper explores the role of a limited liability clause – which allows a tenant to forego paying rent in the event of a crop failure – with regard to contractual structure in agrarian economies. If a tenant’s wealth is sufficient to cover fixed-rent commitments, even if output is low, he will receive a fixed-rent contract. For the landlord, this is preferable to other types of contract because when effort is non-contractible only a fixed-rent contract provides efficient incentives for labor input. If the tenant has little wealth, inefficient share-rent contracts emerge, with the resulting inefficiency varying inversely with the wealth of the tenant. As a result, landlords tend to prefer wealthier tenants. About the Author:
Correspondence: Department of Economic and Social Studies, P.O. Box 2243, N-3103 Tønsberg, Norway, or e-mail to jon.reiersen@hive.no.
Former publications:
Jon Reiersen: Unions,
Wage-Bargaining Institutions and Economic Performance. Høgskolen
i Vestfold. Notat 1/98 Copyright: The Author/Vestfold CollegeThis publication is available in full text
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