Moral Hazard, Targeting and Contract Duration in Agri-Environmental Policy
No hay miniatura disponible
Fecha
Autores
Título de la revista
ISSN de la revista
Título del volumen
Editor
Resumen
Descripción
This paper extends the multi-period agri-environmental contract model of Fraser (2004)
so that it contains a more realistic specification of the inter-temporal penalties for noncompliance,
and therefore of the inter-temporal moral hazard problem in agri-environmental
policy design. On this basis it is shown that a farmer will have an
unambiguous preference for cheating early over cheating late in the contract period based
on differences in the expected cost of compliance. It is then shown how the principal can
make use of this unambiguous preference to target monitoring resources intertemporally,
and in so doing, to encourage full contract duration compliance.