THE WELFARE EFFECTS OF BANNING TOURNAMENTS WHEN COMMITMENT IS IMPOSSIBLE: SOME RESULTS FROM THE BROILER SECTOR
| dc.creator | Roe, Brian E. | |
| dc.creator | Wu, Steven Y. | |
| dc.date | 2017-04-01T20:07:53Z | |
| dc.date.accessioned | 2026-07-09T03:38:30Z | |
| dc.description | We consider the implications of banning tournament contracts and replacing them with fixed performance standard contracts in a multi-period model where the principal cannot commit to future contract parameters. A ban cannot increase total surplus in a static model. In a dynamic model, however, a ban of tournaments can increase total surplus by mitigating the ratchet effect. Calibrating our model to published data from the broiler sector, we find that a ban on use of contemporaneous and lagged relative performance data does not improve total surplus under most circumstances but could increase total surplus in a few instances of low wealth and unitary relative risk aversion. A more enforceable, period-by-period ban is even less likely to be welfare enhancing and does not hinder the principal from redistributing a fixed compensation pool from low ability growers to high ability growers. | |
| dc.identifier | doi:10.22004/ag.econ.22151 | |
| dc.identifier | https://ageconsearch.umn.edu/record/22151/files/sp03ro02.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/22151 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/537230 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/22151 | |
| dc.title | THE WELFARE EFFECTS OF BANNING TOURNAMENTS WHEN COMMITMENT IS IMPOSSIBLE: SOME RESULTS FROM THE BROILER SECTOR | |
| dc.type | Text |