on the fixed nature of sharecropping contracts newbery and stiglitz i979 suggest four stylised facts of sharecropping which theories should attempt to explain the first is the persistence of sharecropping and its coexistence with fixed rental and wage markets under a variety of conditions over centuries of time the second is that in modern developed economies there appears to be a decline in share tenancy thirdly share tenancy is often but not alwavs associated with lower productivity than fixed rental land finally in many economies contracts involve shares of around one half for landlord and tenant this does not vary from contract to contract and does not seem to be the object of negotiation smith i776 and many subsequent authors have likened sharecropping to a tax they argue that under this type of contract tenants choose their labour supply to equate their marginal disutility of labour with their proportionate share of the marginal product instead of the full marginal product they therefore regard sharecropping as an inefficient form of land tenure however this view is difficult to reconcile with the first observation given the coexistence of fixed rent and share contracts it is reasonable to expect that if share contracts were relatively inefficient they would quickly die out this does not appear to have happened more recently it has been argued most notably by cheung i969 that if there is certainty and transactions costs are the same for all contracts then provided a share contract specifies the labour supply of the tenant it leads to the same efficient allocation of resources as a fixed rent or wage contract cheung has used this result as the basis of an explanation for coexistence he suggests that the transaction costs for share contracts are higher than for wage and fixed rent contracts however share contracts have the advantage that they allow the risk to be shared between the landlord and tenant whereas with fixed rent contracts the tenant bears all the risk and with wage contracts the landlord does given varying degrees of risk aversion among landlords and tenants it is possible that for some parties the risk sharing advantages outweigh the transaction cost disadvantages so that they will prefer share contracts whereas with others the reverse is true one problem with this argument raised by stiglitz i974 and newbery i977 is that given constant returns to scale the risk sharing properties of share contracts can be attained with mixtures of fixed rent and wage contracts if these do indeed have lower transaction costs share contracts would not then be observed

infrastructure investment the cost of capital and regulation an assessment the paper considers the role of infrastructure in improving economic performance and its compar ative neglect relative to traditional macroeconomic and microeconomic policies it explains why infrastructure matters why britain s infrastructure performance has been poor and summarizes the scale of the challenge for the coming decade privatization liberalization and competition have focused on monopoly market failure and private incentives but they have neglected the time inconsistency problem which confronts investors in networks with high fixed and sunk costs the failure to commit which has characterized british approaches to infrastructure has been partially addressed through the creation of regulated asset bases rabs backed up by the duty on regulators to ensure that functions can be financed the paper considers how the rabs can be developed to provide credible long term contracts over a wide range of activities and how the financial regu latory regime can complement this commitment notably through the split cost of capital and the indexation of the cost of debt approaches the paper concludes by setting out the building blocks of a credible regulatory framework for infrastructure together with the impacts on reducing the cost of capital the role of the state in reinforcing this commitment and the associated institutions are also set out

a stochastic model of investment marginal q and the market value of the firm this paper presents closed form solutions for the investment and valuation of a competitive firm with a cobb douglas production function and a constant elasticity adjustment cost function in the presence of stochastic prices for output and inputs the value of the firm is a linear function of the capital stock the optimal rate of investmentis an increasing function of the slope of the value function with respect to the capital stock marginal q a mean preserving spread of the distribution of future price increases investment an increase in the scale of the random component of a price can increase decrease or not affect the rate of investment depending on the sign of the covariance of this price with a weighted average of all prices this abstract was borrowed from another version of this item

international comparisons of productivity and its determinants in the natural gas industry the objective of this paper was to evaluate the performance of the natural gas industry using an inter country comparison of productivity level and its determinants three method ologies multilateral tornqvist productivity analysis managerial index system analysis and non parametric efficiency analysis are employed to make a methodological cross checking and to perform diversified analysis from the empirical results we identified the level and growth rate of productivity of individual firms the results also indicated that the korean gas industry has shown a relatively low level of productivity from the results of managerial performance index analysis we found that during the recent years of regulatory changes the final price of gas has decreased dramatically while the productivity growth has not been enough to offset the effect of decreased output price which has resulted in decreased profit we also examine the extent of the allocative scale and managerial efficiency as source components of the overall efficiency based on the performance of best practiced with the results of this study an effective policy measure could be established to improve the productivity and the overall managerial performance in the natural gas industry q 1999 elsevier science b v all rights reserved

multitask agency and contract choice an empirical exploration the multitask agency problem is examined empirically using contracts between private integrated oil companies and their service stations in the city of vancouver the empirical tests assess how variations in the characteristics of one task affect the choice of agent compensation scheme for another comparative statics from the model predict that higher powered incentives will be offered for gasoline sales when the secondary activity is not highly complementary with gasoline retailing where complementarity is measured by the cross price demand effect the covariation in uncertainty and the degree of effort substitutability copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

limited liability moral hazard and share tenancy abstract this paper contributes to the literature on share tenancy by reexamining a framework developed in basu 1992 it is shown that limited liability and moral hazard in effort provides a richer theory of share contracts when the tenant also has discretion in the choice of projects

capacity investment and market power in the economic value of energy firms regulation of energy firms faces the complex problem of balancing private earning a fair rate of return on investment and public assure safe and reliable supply of energy at the lowest possible costs goals tobin s q is a forward looking indicator on investment opportunities and on market power of firms that energy regulators can use for more effective regulation this paper presents the empirical evidence on the determinants of differences in observed values of tobin s q for a sample of large listed energy firms from 10 different countries in the period 2000 2006 we find that adjustment costs represent around sixty percent of the difference between economic and book value of the assets for the representative firm while rents from market power represent the other forty percent therefore across countries there is room for regulatory actions aiming at reducing energy prices but less than what may be inferred from the observed average q values

relative energy price and investment by european firms abstract a dynamic model of investment is estimated with data on non financial firms in 15 european countries across 25 industries over 1991 2006 a rise in real energy price reduces the degree of persistence in the investment adjustment cost function panel results suggest that in manufacturing a 1 rise in real energy price reduces investment by a country s firms by 1 9 relative to that by firms in other countries with a smaller effect for non manufacturing firms the negative effect of a higher relative price of energy on firm level investment is significantly less marked the larger the firm results imply that stabilizing the relative price of energy would steady firm investment with greater gains in stability at smaller and medium sized firms results are robust to consideration of country business cycle effect and firm leverage estimation of investment is based on the euler equation approach with over 21 000 observations individual country regressions imply that a rise in the relative price of energy price has a statistically significant negative effect on firm level investment in 14 out of 15 countries to avoid dynamic panel bias estimation is by generalized method of moments with instrumental variables

efficient estimation of structural hedonic systems when a product or job is not homogeneous but instead embodies several different characteristics it is difficult to use price information about the product to learn anything about the structure of the supply and demand for the embodied characteristics s rosen 1974 highlighted this problem and suggested that the estimated slope of the price characteristic relation the marginal price could be used instead of standard prices in otherwise standard estimation of the supply and demand system however recently brown and h rosen 1982 brown 1983 and mendelsohn 1985 have pointed out that this method is applicable only when the marginal price depends on variables not found in the supply and demand equations in this paper we show that since the hedonic system matches consumers with high demand for the characteristic to firms with low costs of producing it exogenous variables from the supply equation are not valid instruments in the demand equation and vice versa therefore even when the brown rosen mendelsohn brm condition holds estimation of the identified system by standard simultaneous equations techniques will produce inconsistent estimates we then show that the system can be identified despite the absence of the standard instruments and develop an efficient estimator for the identified system since cross equation constraints make estimation of hedonic systems particularly vulnerable to specification error we also consider some specification tests in this section we consider a simple model with only one characteristic the extension to several characteristics is straightforward the basic model developed by rosen can be described as follows firms with different technologies produce products which provide consumers with varying levels of some characteristic z each consumer buys one unit of the good the product is such that an amount of z from two units of the good provides less utility than the same amount of z embodied in a single unit e g acceleration in a car safety in a job consumers

the estimation of demand parameters in hedonic price models this paper shows that the econometric problem of estimating hedonic demand parameters is not a standard identification problem caused by demand supply interaction as has been often assumed estimation procedures based on this assumption lead to biased results the hedonic estimation problem is instead caused by the endogeneity of both prices and quantities when households face a nonlinear budget constraint an instrumental variables solution to this problem is suggested using instruments that exogenously shift the budget constraint

agency theory and franchising some empirical results this article provides an empirical assessment of various agency theoretic explanations for franchising including risk sharing one sided moral hazard and two sided moral hazard the empirical models use proxies for factors such as risk moral hazard and franchisors need for capital to explain both franchisors decisions about the terms of their contracts royalty rates and up front franchise fees and the extent to which they use franchising in this article i exploit several new sources of data on franchising to construct a cross section of 548 franchisors involved in various business activities in the united states in 1986 the data are most consistent with a model based on two sided moral hazard the empirical models are also more successful at explaining the extent to which franchisors choose to franchise stores than at explaining the terms of franchise contracts finally contrary to the predictions of several theoretical models i find that royalty rates and franchise fees are not negatively related

limited liability and the existence of share tenancy abstract the paper considers the problem confronting an absentee landlord who can lease out his land on a fixed rent contract share rent contract or a mixture of the two it is argued that in poor areas it is natural to have each contract underwritten by an implicit limited liability clause which allows a person to forego paying rent under extreme crop failures in the presence of such an implicit clause a certain tension appears between a tenant and a landlord with the former preferring risky projects and the latter preferring safe ones it is shown that in such a case share tenancy turns out to be the dominant system from among the class mentioned above because it minimises the tension between the landlord and the tenant the result is then used to discuss conditions under which share tenancy will tend to wither away

application of the modified tobin s q to an uncertain energy saving project with the real options concept abstract this paper is to develop a modified tobin s q evaluation method which successfully combines the evaluation criteria of the traditional tobin s q and the real options this study provides flexible thinking for decision making criteria that is it clearly provides decision makers with a reference in choosing enter or exit strategies such as quantitative indicators references the proposed model introduces two variables stochastic process in continuous time and explores the impact of the occurrence of unexpected events on the project value so that it can more authentically response to the project value the studied issue deals with the firms that have not established energy saving equipment yet it attempts to figure out the optimal timing to adopt an energy saving investment project when it is beneficial and the optimal timing to terminate it when the continuous operation of that business is unprofitable the future discounted benefit cost ratio q follows the geometric brownian motion with the poisson jump process and the replacement of investment equipment except for the evaluation of energy saving equipment investment project the proposed model can be applied to other related project evaluation issues such as energy saving co 2 emission reduction or general investment projects

multi task sharecropping contracts the italian mezzadria we use recent developments in the multi task principal agent methodology to study a sharecropping contract that was pervasive in central italy we distinguish between subsistence crops and cash crops we analyse the spillover effect from one crop to the other and we show that this reduces the ability of this sharecropping economy to adjust to a changed environment we trace the effects of the changes in agricultural prices in the second half of the nineteenth century finally we propose some explanation for the puzzling phenomenon of the reintroduction of many feudal clauses in the sharecropping contract when the rest of the italian economy was beginning to modernize copyright 1996 by the london school of economics and political science

endogenous matching and the empirical determinants of contract form empirical work on contracts typically regresses contract choice on observed principal and agent characteristics if i some of these characteristics are unobserved or partially observed and ii there are incentives whereby particular types of agents end up contracting with particular types of principals estimated coefficients on the observed characteristics may be misleading we address this endogenous matching problem using a data set on agricultural contracts between landlords and tenants in early renaissance tuscany controlling for endogenous matching has an impact on parameters of interest and tenants risk aversion appears to have influenced contract choice

an analysis of the principal agent problem most analyses of the principal agent problem assume that the principal chooses an incentive scheme to maximize expected utility subject to the agent s utility being at a stationary point an important paper of mirrlees has shown that this approach is generally invalid we present an alternative procedure if the agent s preferences over income lotteries are independent of action we show that the optimal way of implementing an action by the agent can be found by solving a convex programming problem we use this to characterize the optimal incentive scheme and to analyze the determinants of the seriousness of an incentive problem

franchising and risk management franchising is an important and controversial form of vertical integration allegations of opportunistic behavior by franchisors have led to calls for public regulation and in some states fairness in franchising laws the advisability of such regulation depends on the long run incentives to franchise if franchising is a temporary step on the path to complete ownership integration regulation may be called for alternatively if complete or partial franchising is a permanen t market solution regulation is at least contestable this paper offer s new evidence on the incentives to franchise copyright 1988 by american economic association

testing between competing models of sharecropping the marshallian approach assumes a prohibitively high cost of monitoring the sharecropper s activities while the monitoring approach argues that landlords stipulate and effectively monitor sharecroppers activities i present new evidence using detailed data collected from eight indian villages most tenants own some land of their own this provides a controlled environment in studying the impact of contractual arrangements the differences in input and output intensities on owned minus sharecropped land of the same household are found to be sizable and significant suggesting a rejection of the monitoring approach and supporting the notion of the marshallian productive inefficiency of sharecropping

behavior of the firm under regulatory constraint a recent article by akira takayama discusses an earlier paper by harvey averch and leland l johnson on fair rate of return regulation of public utilities although takayama p 255 agrees with averch and johnson s general conclusions that a firm will tend to increase its investment with the introduction of an active constraint on its rate of return he criticizes the a j argument as being confusing ambiguous and in error takayama then attempts a clarification and presents a new formulation which leads to the a j result quoted above this comment will discuss several of takayama s criticisms in addition to showing that the so called a j effect cannot be derived from the basic assumptions made by both averch and johnson and takayama 1 we will show that the very assumptions used to prove the a j effect by defining the region of x require an assumption that the a j effect exists in the first place

intangible capital aspects of advertising and r d expenditures twenty years have passed since economists first emphasized the intangible capital aspects of advertising according to this view consumers tend to forget brands and continuous advertising is needed to maintain a given rate of sales thus advertising expenditures can be viewed as a capital good that depreciates over time and needs maintenance and repair 22 p 197 more recently weiss 25 among others has suggested that research and development r d costs might also be capitalized as such expenditures yield benefits mainly in the future 25 p 421 unfortunately most analyses of the intangible capital issue have been limited to advertising largely because no comprehensive data on r d were available until quite recently however important recent theoretical contributions on the topic and improvements in data availability now make it possible more completely to consider the intangible capital aspects of both advertising and r d expenditures here the intangible capital issue is investigated through use of a market valuation model in this approach significant future intangible capital effects of advertising and r d are suggested to the extent that current expenditures have significant effects on the market value of the firm given positive market value influences individual coefficient estimates can be used to estimate both the total stock of intangible capital as well as average annual depreciation rates for advertising and r d while these depreciation rate estimates are interfirm averages and undoubtedly err in individual instances they can be quite useful in indicating the general magnitude of corporate profit and tax misstatement due to current reporting and tax policies in section i below various articles closely related to this study are reviewed section ii develops a valuation model embodying intangible capital considerations the data are discussed in section iii and estimation results are presented in section iv and finally conclusions and implications for public policy are discussed in section v

the tenuous trade off between risk and incentives empirical work testing for a negative trade off between risk and incentives has not had much success the data suggest a positive relationship between measures of uncertainty and incentives rather than the posited negative trade off i argue that the existing literature fails to account for an important effect of uncertainty on incentives through the allocation of responsibility to employees when workers operate in certain settings firms are content to assign tasks to workers and monitor their inputs by contrast when the situation is more uncertain they delegate responsibility to workers but to constrain their discretion base compensation on observed output

efficiency based rank assessment for electric power industry a combined use of data envelopment analysis dea and dea discriminant analysis da abstract this study discusses a combined use of dea data environment analysis and dea da discriminant analysis to determine the efficiency based rank of energy firms this type of performance evaluation is important because we often have a difficulty in accessing a large sample on energy firms to derive reliable empirical results the proposed approach is useful in dealing with such a limited number of energy firms often found in previous dea studies on energy industries in the world the proposed approach uses dea to classify energy firms into efficient and inefficient groups based upon their efficiency scores then it utilizes dea da to assess their efficiency scores and ranks in this stage we can find an adjusted efficiency score for each energy firm the proposed approach provides us with the following analytical capabilities all of which cannot be found in a conventional use of dea in assessing energy firms first the proposed dea approach can avoid zero in all multipliers on efficient energy firms by incorporating scsc strong complementary slackness condition so that it can handle an occurrence of multiple reference sets and multiple projections the dea result classifies all energy firms into efficient and inefficient groups second dea da applied to the two groups evaluates all energy firms by an industry wide evaluation not depending upon a limited number of efficient energy firms in a reference set as found in a conventional use of dea the analytical capability can reduce the number of efficient energy firms third the proposed approach can provide their efficiency based ranking scores finally we can conduct a rank sum test based upon their ranking scores to obtain a statistical inference as an application this study uses the proposed approach to examine the performance of japanese electric power industry we find two economic implications one of the two implications is that no major change has occurred in the operational performance of japanese electric power industry because of japanese sluggish economy from 2005 to 2009 the other implication indicates that there are strategic differences in the operation of japanese electric power firms after the liberalization

information and the operation of markets tests based on a general equilibrium model of land leasing in india abstract this paper develops an estimable general equilibrium model of land leasing to test the extent to which information is commonly held in a village and whether village markets are efficient information regarding the relative farming skill of households is found to be widespread but the assumption of perfectly efficient markets within the village is rejected these results have ramifications for the estimation of agricultural household models and for our understanding of rural institutions the model is derived from the primitives of the production technology the extent of information and the distributions of assets and several household unobservables simultaneity and selection issues are dealt with explicitly in a two stage maximum likelihood estimation procedure using panel data from india

investigating the risk return relationship of information technology investment firm level empirical analysis this paper develops empirical proxy measures of information technology it risk and incorporates them into the usual empirical models for analyzing it returns production function and market value specifications the results suggest that it capital investments make a substantially larger contribution to overall firm risk than non it capital investments further firms with higher it risk have a higher marginal product of it relative to firms with low it risk in the market value specification the impact of it risk is positive and significant and inclusion of the it risk term substantially reduces the coefficient on it capital we estimate that about 30 of the gross return on it investment corresponds to the risk premium associated with it risk taken together our results show that it risk provides part of the explanation for the unusually high valuations of it capital investment in recent research

contract choice in modern agriculture cash rent versus cropshare e conomists have expended enormous effort examining the rationale for various contractual arrangements in agriculture particularly sharecropping while economists have made considerable theoretical efforts to understand agricultural contracts few empirical studies have been undertaken the dearth of empirical analyses of agricultural contracts is particularly striking for modern western agriculture this is an important omission not only because the existing empirical work tends to focus on the question of efficiency but also because the theoretical models tend to examine contracts that bear little resemblance to those found in the united states today

retail contracting theory and practice we summarize a number of regularities that arise in the empirical literature on contractual relationships between manufacturers and their exclusive resellers we do this using studies of traditional and business format franchise relationships as well as studies of salesforce integration decisions some of the patterns that we uncover are consistent with a standard incentive cum insurance theory of organization while others are not we brie y review some theoretical extensions that seem promising in terms of reconciling seeming con icts between theory and practice i introduction manufacturers of retail products must decide whether to sell their products to consumers themselves vertical integration or to sell via independent retailers vertical separation when manufacturers do not perform the sales function internally but want exclusive retailers they usually choose some form of franchising 1 many theories attempt to explain the choice of retail organizational form moreover a considerable body of empirical evidence concerning this choice is accumulating we attempt to evaluate this econometric evidence and relate it to the theories to accomplish this task we assess studies of franchising arrangements as well as studies of sales force organization in industrial settings the paper is organized as follows in the next section we highlight a number of regularities that arise in the empirical literature on retail contracting in particular we nd that i risk is positively related to the use of high powered incentives vertical separation ii the importance of the agent s eiort in production is positively related to the use of high powered incentives

moral hazard land fertility and sharecropping in a rural area of the philippines abstract introducing concerns about land fertility for landlords in a principal agent model of sharecropping with moral hazard we show that the optimal contract under limited commitment reflects a trade off between production and land quality maintenance using data from the philippines a model where the leasing out and contract choices are simultaneous is estimated and avoids the selectivity bias of observed contracts landlords prefer to use more incentive contracts for more fertile plots and less incentive ones when crop choices induce land overuse empirical tests reject the model of pure risk sharing in production and show the interest of taking land quality maintenance into account

an econometric model of farm tenures in fifteenth century florence we estimate a discrete choice model of farm tenures in fifteenth century florence using data in the form of an unbalanced panel with individual farms nested within landlords total property holdings the probabilities of wage rental and sharecropping tenures are estimated allowing for landlord specific random effects specification tests are used to validate the model our results emphasize the role of long lived fixed assets vines vulnerable to damage by short term over production as a factor favouring sharecropping which taxes over production however we find evidence against theories emphasizing high monitoring costs as an influence favouring rental contracts

regulation competition and liberalization in many countries throughout the world regulators are struggling to determine whether and how to introduce competition into regulated industries this essay examines the complexities involved in the liberalization process while stressing the importance of case specific analyses this essay distinguishes liberalization policies that generally are procompetitive from corresponding anticompetitive liberalization policies

market value r d and patents abstract a significant relationship is found between the market value of the firm and its intangible capital proxied by past r d expenditures and the number of patents based on a time series cross section analysis of data for large u s firms

the q theory of investment with many capital goods the q theory of investment which relates investment to the ratio of market to replacement value of capital has attracted considerable attention in a recent series of papers for instance a q variable has been used as an independent variable in empirical investment equations estimated by george von furstenberg 1977 von furstenberg et al 1980 burton malkiel et al 1979 and others these papers however leave somewhat unclear the theoretical rationale for using q as an investment determinant this has motivated work by hiroshi yoshikawa 1980 lawrence summers 1981 michael salinger and summers 1981 and fumio hayashi 1982 who show that under certain conditions the rate of investment of a sharevalue maximizing firm is indeed a function of q this is an important result because it shows that investment equations with q an independent variable are not ad hoc constructions rather they are grounded in a theory of the firm with an appealing behavioral hypothesis viz value maximization an important assumption underlying this research is that capital can be treated as a homogeneous good of course this is an extremely common assumption in the analysis of investment and is not particularly more bothersome in the q theory context than elsewhere nonetheless there are certain situations where it may be desirable or even essential to be able to study investment disaggregated by type of capital good thus the purpose of this paper is to examine whether and how the q theory can be extended to this more general case 1 intuitively one would expect some difficulty with the q theory in the many capitalgood context as already noted by james tobin and william brainard 1977 p 243 and by salinger and summers p 12 one way to see why is to recall the tobin brainard distinction between marginal and average q as hayashi writes

the choice of organizational form the case of franchising abstract we examine companies that franchise some units and centrally operate own others the agency problems confronting these two organizational forms are analyzed testable hypotheses are developed the empirical results support the notion that owning versus franchising reflects a trade off among agency related problems the cost of monitoring store managers appears to be especially important in the own franchise decision the level of repeat business and initial investment requirements per unit also appear to be important

sharecropping and the interlinking of agrarian markets one of the often noted features of less developed agrarian economies is the existence of interlinkages among the land labor credit and product markets the landlord is often the supplier of credit he frequently purchases and markets the output of the tenant farmers and often sells raw materials and even consumption goods to his tenant farmers how can this phenomenon be explained what are the welfare consequences of attempts to restrict these practices which often seem to constitute restraints on free trade these are the questions to which this paper is addressed a general set of arguments applicable to both competitive and noncompetitive environments are presented to situations where all the terms of the contract are determined in an optimal way as well as to situations where many of the terms are specified institutionally section i examines interlinked credit and tenancy contracts section ii examines interlinked marketing and tenancy contracts section iii points out the possible interlinking between labor contracts and consumption goods markets and section iv presents the different equilibrium frameworks discussed in the paper such as monopoly monopsony competition and equilibria with surplus labor

the relation between firm growth and q with multiple capital goods theory and evidence from panel data on japanese firms we derive from a model of investment with multiple capital goods a one to one relation between the growth rate of the capital aggregate and the stock market based q we estimate the growth q relation using a panel of japanese manufacturing firms taking into account the endogeneity of q identification is achieved by combining the theoretical structure of the q model and an assumed serial correlation structure of the technology shock which is the error term in the growth q equation for early years of our sample cash flow has significant explanatory power over and above q the significance of cash flow disappears for more recent years for the heavy industry when japanese capital markets was liberalized the estimated q coefficient implies that the adjustment cost is less than a half of gross profits net of the adjustment cost

transactions costs and the efficient organization of production a study of timber harvesting contracts a transaction costs framework is developed to explain the choice between lump sum and per unit payment provisions in private timber harvesting contracts predictions about which contract type minimizes the transaction costs of presale measurement and contract enforcement and monitoring are derived and tested using private timber sales contracts from north carolina the empirical results provide strong support for the transaction costs approach and also reject several predictions from a risk based model the transaction costs framework also provides insights into the choice between negotiated and competitive sales procedures

uncertainty entrepreneurship and sharecropping in india this study attempts to explain the coexistence of different farm lease arrangements in terms of the varying significance of entrepreneurial functions in india crop sharing arrangements are common in areas of relative economic certainty with very little scope for decision making for example for product and factor substitution and where the entrepreneurial profit is low fixed cash rents are common in situations of high uncertainty where the scope for decision making is significant or where the crops are highly profitable efficiency considerations predominate in areas of sharecropping favoring a smaller farm size whereas under high uncertainty large size is favored for reducing risk

the dynamic efficiency of regulatory constitutions in this article we model regulation as a repeated game between a utility facing a random sequence of demands and a regulator tempted to underreward past investment rate of return regulation designed with a constitutional commitment to an adequate rate of return on capital prudently invested is able to support an efficient investment program as a subgame perfect nash equilibrium for a larger set of parameter values than rate of return regulation without such a commitment furthermore rate of return regulation is superior to price regulation according to the same criterion assuming that the regulator is unable to make state contingent transfer payments

the spread of sharecropping in tuscany the political economy of transaction costs land tenure is central to many agricultural transformations the author examines one of these transformations the spread of sharecropping in late medieval and early modern tuscany previous research suggested that sharecropping spread as agricultural relations were refeudalized in contrast the author s analyses of fixed term and share term leasing sharecropping show that landlords used sharecropping when it lowered their overall costs of labor supervision and land management however to explain the spread of sharecropping the florentine political economy which created particular patterns of land management costs and labor supervision costs must also be considered florence was a well developed center for urban manufacturing landlords were frequently urban merchants and they resided in florence these factors were crucial in shaping agricultural relations landlords use of sharecropping to reduce the overall costs of land management and labor supervision increased as the distance from florence the site of landlords principal activities increased as the size of farms increased and when crops had high costs of labor supervision and land management thus the use of sharecropping to lower costs associated with agricultural production must be considered in the context of the tuscan political economy

credit incentives and reputation a hedonic analysis of contractual wage profiles a hedonic analysis of principal agent employment contracts is developed in which workers and employers exchange labor services and contractual payment patterns within this framework tests of alternative hypotheses are formulated and applied to contract data from a unique household level survey of economic activity in rural china in 1935 the results indicate that credit market constraints motivated workers and employers contract choices that shirking by workers rather than by employers was the dominant incentive issue that reputational concerns rather than threats of termination were the key worker disciplining device and finally that the contract s third party acted as an enforcement device rather than as a matchmaker subject to the availability of matched agent principal data this structural approach to modeling agency relationships can also be used in contemporary settings

hedonic prices and implicit markets estimating demand and supply functions for differentiated products in choosing the level of quality to purchase the buyer of a differentiated product also chooses a point on the marginal price schedule for that product hence in general the demand functions for product characteristics cannot be consistently estimated by ordinary least squares market equilibrium results in a matching of characteristics of demanders and suppliers this matching restricts the use of buyer and seller characteristics as instruments when estimating demand and supply functions for product characteristics the paper develops these issues a stochastic structure for hedonic equilibrium models is then proposed identification results are presented and estimation procedures are outlined

energy price uncertainty energy intensity and firm investment this paper examines the effect of energy price uncertainty on firm level investment an error correction model of capital stock adjustment is estimated with data on u s manufacturing firms higher energy price uncertainty is found to make firms more cautious by reducing the responsiveness of investment to sales growth the result is robust to consideration of energy intensity by industry the effect is greater for high growth firms it must be emphasized that the direct effect of uncertainty is not estimated conditional variance of energy price is obtained from a garch model findings suggest that stability in energy prices would be conducive to greater stability in firm level investment