@article{Alexander:123595,
      recid = {123595},
      author = {Alexander, Corinne E. and Goodhue, Rachael E. and Rausser,  Gordon C.},
      title = {Do Contracting Incentives Matter?},
      address = {1999-11-12},
      number = {411-2016-25661},
      pages = {25},
      month = {Nov},
      year = {1999},
      abstract = {Agency theory explanations for agricultural contract  designs are often observationally equivalent to perfect  information explanations. Further in order to test properly  the hypothesis that moral hazard is important one must  first test and accept the hypothesis that agents respond to  contract incentives. If agents do not respond to contract  incentives then it is unlikely that moral hazard is  significant. Accordingly we move beyond contract design and  focus on whether or not we can reject the hypothesis that  moral hazard is important by examining growers responses to  price incentives for processing tomato quality. We utilize  a natural experiment.  In our data set growers deliver  processing tomatoes under a price incentives contract and  for a fixed price per ton. We compare the quality of the  tomatoes delivered under the two arrangements. Our results  suggest that growers indeed do respond to price incentives  by improving tomato quality.},
      url = {http://ageconsearch.umn.edu/record/123595},
      doi = {https://doi.org/10.22004/ag.econ.123595},
}