Journal Article

Contracting in the wine supply chain with bilateral moral hazard, residual claimancy and multi-tasking

Bodo Steiner

in European Review of Agricultural Economics

Volume 39, issue 3, pages 369-395
Published in print July 2012 | ISSN: 0165-1587
Published online October 2011 | e-ISSN: 1464-3618 | DOI: https://dx.doi.org/10.1093/erae/jbr054
Contracting in the wine supply chain with bilateral moral hazard, residual claimancy and multi-tasking

More Like This

Show all results sharing these subjects:

  • Marketing
  • Firm Objectives, Organization, and Behaviour
  • Production and Organizations

GO

Show Summary Details

Preview

This paper takes a quasi-case-study approach to stylised wine industry facts to assess predictions about the optimal sharing rule from a principal–agent model with residual claimancy. An optimal sharing contract is developed between a grape grower and a winery, when a risk-averse grower allocates efforts among multiple activities that differ in measurability, while double-sided moral hazard is assumed to be present. Several comparative static results regarding the Pareto optimal share are in line with certain production practices and properties of observed contracts that are found in markets where residual claimancy is used, namely in Australia, California, New Zealand and France.

Keywords: incentive contract; residual claimancy; wine; double-sided moral hazard; multi-tasking; supply chain; L22; M31; D23

Journal Article.  9343 words.  Illustrated.

Subjects: Marketing ; Firm Objectives, Organization, and Behaviour ; Production and Organizations

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.